Finding 2024-004: Failure to Properly Complete Required Verification Procedures Federal Agency: U.S. Department of Education (USDE) Program Name: Student Financial Assistance Cluster (SFA) ALN and Program Expenditures: 84.007 ($861,540) 84.033 ($1,550,626) 84.063 ($6,966,346) 84.268 ($94,400,556) Federal Award Numbers: P007A2311305, P007A221305 P033A221305, P033A151305 P063P20231389, P063Q231389, P063Q201389, P063Q221389, P063P221389 P268K241389 Federal Award Year: July 1, 2023 to June 30, 2024 Questioned Costs: $100 Compliance Requirement: Verification Condition Found: The University did not properly complete verification procedures as required by SFA program regulations. In order to validate the accuracy of information reported by applicants for financial aid, the U.S. Department of Education (USDE) requires schools participating in federal student financial assistance programs to perform procedures to verify the accuracy of student financial and household information used to compute the expected family contribution (EFC) of each applicant. USDE selects students for verification and schools are required to establish and follow a verification policy that complies with SFA program regulations. The University verifies the Institutional Student Information Records (ISIR) for all students selected for verification by USDE. During our testing over 40 students who were disbursed student financial aid totaling $770,615 (from a total population of 299 students) who were selected for verification by USDE, we noted the following exceptions: - For one student (who received student financial aid awards totaling $12,645), the documentation provided by the student to verify the student’s adjusted gross income (AGI) was not consistent with the amount reported on the ISIR used to package the student’s financial aid award. Specifically, we noted the ISIR was understated by $72 between the supporting documentation provided and the ISIR data. The student’s EFC was not affected by this error. - For one student (who received student financial aid awards totaling $5,645), the documentation provided by the student to support the family size was not consistent with the amount reported on the ISIR used to package the student’s financial aid award. Specifically, we noted the family size was one person higher on the documentation provided compared to the ISIR data. The student’s EFC was overstated by $1,367 but did not impact the amount of Title IV funds awarded. - For one student (who received student financial aid awards totaling $7,425), the documentation provided by the student to verify the student’s earned income was not consistent with the amount reported on the ISIR used to package the student’s financial aid award. Specifically, we noted the ISIR was understated by $113 between the supporting documentation provided and the ISIR data. The student’s EFC was not affected by this error. - For one student (who received student financial aid awards totaling $9,945), the documentation provided by the student to support the parent’s income tax paid was not consistent with the amount reported on the ISIR used to package the student’s financial aid award. Specifically, we noted the income tax paid per the parent’s tax return was $1,902 greater than what was reported on the ISIR. The student’s EFC was understated by $164 and as a result, the student was over-awarded Federal Pell Grant by $100. - For one student (who received student financial aid awards totaling $9,745), the documentation provided by the student to support the number of individuals enrolled in college within the household was not consistent with the number reported on the ISIR used to package the student’s financial aid award. Specifically, we noted the number enrolled in college was one person higher on the documentation provided compared to the ISIR data. The student’s EFC was understated by $59 but did not impact the amount of Title IV funds awarded. - For one student (who received student financial aid awards totaling $10,395), the documentation provided by the student to support the parent education tax credit was not consistent with the number reported on the ISIR used to package the student’s financial aid award. Specifically, we noted the parent tax education credit per the parent’s tax return was $90 greater than what was reported on the ISIR. The student’s EFC was not affected by this error. - For one student (who received student financial aid awards totaling $7,421), the tax return maintained by the University to support the ISIR data was unsigned. Further, we noted management review controls implemented by the University failed to ensure verification procedures were properly performed in accordance with SFA program regulations. Total student financial aid disbursements for the SFA Cluster were $110,068,708 during the year ended June 30, 2024. Criteria: According to 34 CFR 668.57, a University must verify: a student and/or parent’s AGI, income earned from work, U.S. income tax paid, number of family members in the household, number of family household members enrolled in eligible postsecondary institutions, and other information that may be specified in the annual federal register notice. Additionally, 34 CFR 668.57(a)(1)(i) states that tax returns must include the signature of the filer of the return or of one of the filers of a joint return. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure verification procedures are performed and corrections are made as required by SFA program regulations. Cause: In discussing these conditions with University officials, they stated that manual errors were made during the verification process. Possible Asserted Effect: Failure to properly perform verification procedures and correct ISIR information in accordance with SFA program regulations may result in students receiving awards for which they are not eligible and an unallowable cost being charged to the federal program Repeat Finding: A similar finding was not reported in prior years. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend the University review its policies and procedures to ensure the verification process is performed in accordance with SFA program regulations to ensure all corrections required as the result of the verification procedures are properly reported to USDE and awards are adjusted for changes in EFC as appropriate. Views of University Officials: The University concurs with the finding and will increase staff training.
Finding 2024-005: Failure to Notify Recipients of Federal Direct Loan and Federal Pell Grant Disbursements Federal Agency: U.S. Department of Education (USDE) Program Name: Student Financial Assistance Cluster (SFA) ALN and Program Expenditures: 84.268 ($94,400,556) 84.063 ($6,966,346) Federal Award Numbers: P268K241389 P063P241389 Federal Award Year: July 1, 2023 to June 30, 2024 Questioned Costs: None Compliance Requirement: Disbursements to or on Behalf of Students Condition Found: The University did not notify students of the amount and type of Title IV funds the student or his or her parent was expected to receive prior to making a disbursement to the students under the SFA program. During our testing of 47 student disbursements under the Federal Direct Loan (FDL) program totaling $527,494 and eight student disbursements under the Federal Pell Grant (Pell) totaling $17,354, we noted the following exceptions: - The University did not notify one student (with a FDL disbursement of $6,834) of the amount of FDL funds they were expected to receive prior to making the disbursement to the student. - The University did not notify one student (with a Pell disbursement of $2,465) of the amount of Pell funds they were expected to receive prior to making the disbursement to the student. Further, we noted management review controls implemented by the University were not designed at a level of precision to ensure University sent required notifications to students prior to the disbursement of Title IV funds. Total disbursements for the FDL program and Pell were $94,400,556 and $6,966,346, respectively, during the year ended June 30, 2024. Criteria: According to 34 CFR 668.165(a)(1), before an institution disburses Title IV, Higher Education Act (HEA) program funds for any award year, the institution must notify a student of the amount of funds that the student or his or her parent can expect to receive under each Title IV, HEA program, and how and when those funds will be disbursed. In addition, 2 CFR 200.303, requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that required notifications are sent to students prior to the disbursement of Title IV funds. Cause: In discussing these conditions with University officials, they stated that at the time of the findings, University financial aid notifications were not on an automated schedule. Possible Asserted Effect: Failure to notify students of the amount and type of Title IV funds the student or his or her parent are expected to receive prior to making a disbursement results in noncompliance with SFA program requirements. Repeat Finding: A similar finding was reported in prior year audit as finding number 2023-003. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend the University review its internal control procedures to ensure notifications are made to students of the amount and type of Title IV funds the student or his or her parent are expected to receive prior to making the disbursement under the SFA program. Views of University Officials: The University concurs with the finding and have mitigated the issue.
Finding 2024-003: Failure to Determine Eligibility in Accordance with SFA Regulations Federal Agency: U.S. Department of Education (USDE) Program Name: Student Financial Assistance Cluster (SFA) ALN and Program Expenditures: 84.007 ($861,540) 84.033 ($1,550,626) 84.063 ($6,966,346) 84.268 ($94,400,556) Federal Award Numbers: P007A2311305, P007A221305 P033A221305, P033A151305 P063P20231389, P063Q231389, P063Q201389, P063Q221389, P063P221389 P268K241389 Federal Award Year: July 1, 2023 to June 30, 2024 Questioned Costs: $52,604 Compliance Requirement: Eligibility Condition Found: The University disbursed federal aid to an ineligible student. An institution must establish a reasonable satisfactory academic progress (SAP) policy for determining whether an otherwise eligible student is making satisfactory academic progress in their educational program and may receive assistance under Title IV programs. The University’s SAP policy states a student must maintain a cumulative grade point average (GPA) of at least 2.0, complete a minimum of at least 66% of all attempted cumulative units, and successfully complete degree-required coursework within 150% of the normal timeframe. During our testwork over a sample of 55 students who were disbursed student financial aid totaling $2,469,633, we noted one student was disbursed $20,284 of unsubsidized Federal Direct Loans and $32,320 of PLUS Federal Direct Loans (totaling $52,604) for the 2023-2024 academic year although the student did not meet the University’s SAP policy requirements. Specifically, we noted the student had completed 57% of all attempted cumulative units which is below the required minimum of 66%. Further, we noted management review controls implemented by the University were not designed at a level of precision to ensure the University disbursed funds to students who met SAP requirements. Total student financial aid disbursements for the SFA Cluster were $110,068,708 during the year ended June 30, 2024. Criteria: According to 34 CFR 668.34(a)(7), a student who has not achieved the required GPA, or who is not successfully completing his or her educational program at the required pace, is no longer eligible to receive assistance under the Title IV, Higher Education Act (HEA) programs. In addition, 2 CFR 200.303, requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure student awards are packaged and disbursed to eligible students in accordance with program regulations. Cause: In discussing these conditions with University officials, they stated that a manual edit for this one student was incorrectly made by a staff member. Possible Asserted Effect: Failure to properly determine student eligibility in accordance with SFA program regulations may result in students receiving Title IV funds for which they are not eligible, resulting in unallowable costs. Repeat Finding: A similar finding was not reported in prior years. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend the University review its internal control procedures to ensure that student eligibility is determined in accordance with SFA program regulations. Views of University Officials: The University concurs with the finding and will increase staff training.
Finding 2024-004: Failure to Properly Complete Required Verification Procedures Federal Agency: U.S. Department of Education (USDE) Program Name: Student Financial Assistance Cluster (SFA) ALN and Program Expenditures: 84.007 ($861,540) 84.033 ($1,550,626) 84.063 ($6,966,346) 84.268 ($94,400,556) Federal Award Numbers: P007A2311305, P007A221305 P033A221305, P033A151305 P063P20231389, P063Q231389, P063Q201389, P063Q221389, P063P221389 P268K241389 Federal Award Year: July 1, 2023 to June 30, 2024 Questioned Costs: $100 Compliance Requirement: Verification Condition Found: The University did not properly complete verification procedures as required by SFA program regulations. In order to validate the accuracy of information reported by applicants for financial aid, the U.S. Department of Education (USDE) requires schools participating in federal student financial assistance programs to perform procedures to verify the accuracy of student financial and household information used to compute the expected family contribution (EFC) of each applicant. USDE selects students for verification and schools are required to establish and follow a verification policy that complies with SFA program regulations. The University verifies the Institutional Student Information Records (ISIR) for all students selected for verification by USDE. During our testing over 40 students who were disbursed student financial aid totaling $770,615 (from a total population of 299 students) who were selected for verification by USDE, we noted the following exceptions: - For one student (who received student financial aid awards totaling $12,645), the documentation provided by the student to verify the student’s adjusted gross income (AGI) was not consistent with the amount reported on the ISIR used to package the student’s financial aid award. Specifically, we noted the ISIR was understated by $72 between the supporting documentation provided and the ISIR data. The student’s EFC was not affected by this error. - For one student (who received student financial aid awards totaling $5,645), the documentation provided by the student to support the family size was not consistent with the amount reported on the ISIR used to package the student’s financial aid award. Specifically, we noted the family size was one person higher on the documentation provided compared to the ISIR data. The student’s EFC was overstated by $1,367 but did not impact the amount of Title IV funds awarded. - For one student (who received student financial aid awards totaling $7,425), the documentation provided by the student to verify the student’s earned income was not consistent with the amount reported on the ISIR used to package the student’s financial aid award. Specifically, we noted the ISIR was understated by $113 between the supporting documentation provided and the ISIR data. The student’s EFC was not affected by this error. - For one student (who received student financial aid awards totaling $9,945), the documentation provided by the student to support the parent’s income tax paid was not consistent with the amount reported on the ISIR used to package the student’s financial aid award. Specifically, we noted the income tax paid per the parent’s tax return was $1,902 greater than what was reported on the ISIR. The student’s EFC was understated by $164 and as a result, the student was over-awarded Federal Pell Grant by $100. - For one student (who received student financial aid awards totaling $9,745), the documentation provided by the student to support the number of individuals enrolled in college within the household was not consistent with the number reported on the ISIR used to package the student’s financial aid award. Specifically, we noted the number enrolled in college was one person higher on the documentation provided compared to the ISIR data. The student’s EFC was understated by $59 but did not impact the amount of Title IV funds awarded. - For one student (who received student financial aid awards totaling $10,395), the documentation provided by the student to support the parent education tax credit was not consistent with the number reported on the ISIR used to package the student’s financial aid award. Specifically, we noted the parent tax education credit per the parent’s tax return was $90 greater than what was reported on the ISIR. The student’s EFC was not affected by this error. - For one student (who received student financial aid awards totaling $7,421), the tax return maintained by the University to support the ISIR data was unsigned. Further, we noted management review controls implemented by the University failed to ensure verification procedures were properly performed in accordance with SFA program regulations. Total student financial aid disbursements for the SFA Cluster were $110,068,708 during the year ended June 30, 2024. Criteria: According to 34 CFR 668.57, a University must verify: a student and/or parent’s AGI, income earned from work, U.S. income tax paid, number of family members in the household, number of family household members enrolled in eligible postsecondary institutions, and other information that may be specified in the annual federal register notice. Additionally, 34 CFR 668.57(a)(1)(i) states that tax returns must include the signature of the filer of the return or of one of the filers of a joint return. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure verification procedures are performed and corrections are made as required by SFA program regulations. Cause: In discussing these conditions with University officials, they stated that manual errors were made during the verification process. Possible Asserted Effect: Failure to properly perform verification procedures and correct ISIR information in accordance with SFA program regulations may result in students receiving awards for which they are not eligible and an unallowable cost being charged to the federal program Repeat Finding: A similar finding was not reported in prior years. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend the University review its policies and procedures to ensure the verification process is performed in accordance with SFA program regulations to ensure all corrections required as the result of the verification procedures are properly reported to USDE and awards are adjusted for changes in EFC as appropriate. Views of University Officials: The University concurs with the finding and will increase staff training.
Lack of Internal Controls Over the Reporting Process Significant Deficiency Reclamation States Emergency Drought Relief Program, AL 15.514 Condition During our audit of the District’s compliance with federal program requirements, we noted that the entity does not have established internal controls over the reporting process. Specifically, there are no formal procedures in place to ensure the accuracy, completeness, and timeliness of required federal reports. Criteria Per 2 CFR § 200.303, non-federal entities must establish and maintain effective internal control over federal awards to provide reasonable assurance that the entity is managing the awards in compliance with applicable regulations. Additionally, 2 CFR § 200.327 requires recipients to submit performance and financial reports that are accurate, complete, and timely. Cause This is the first year the District has been subject to a single audit, exceeding the $750,000 expenditure threshold, and has not yet developed formal policies or procedures for reviewing and approving required financial and programmatic reports. Effect The lack of internal controls increases the risk of inaccurate, incomplete, or untimely reporting, which could result in noncompliance with federal requirements and potential future corrective actions by granting agencies. Recommendation We recommend that the District develop and implement formal policies and procedures to ensure that federal reports are reviewed for accuracy, completeness, and timeliness prior to submission. Management should assign responsibility for report preparation and review, implement checklists or reconciliation processes, and provide training to staff involved in federal reporting. Views of Responsible Officials See the attached Corrective Action Plan.
Part III – Findings and Questioned Costs Relating to Federal Awards Finding No. 2024-001 – Bi-weekly Reporting Federal Program ALN 21.027 Coronavirus State and Local Fiscal Recovery Fund Name of Federal Agency U.S. Department of Treasury Pass-through Entity Puerto Rico Department of Treasury Category Internal Control/Compliance Compliance Requirement Reporting Criteria The resolution 2022-52 states the following: “WHEREAS, besides the compliance requirements of a federal award SAL must: (1) submit biweekly financial reports in which eligible use of funds is shown until the full expense is evidenced; (2) submit monthly reports in which evidence-based metrics demonstrate the effectiveness of the projects; and (3) include in a distribution agreement a provision that if the project fails to qualify for reimbursement because negligence or failure to meet applicable standards or requirements on the part of SAL, GPR has the option to recoup such funds from SAL.” In addition, as stated in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance), § 200.303 Internal controls, “the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards.” Condition During our reporting test, we detected reports that were submitted after the corresponding biweekly period. In addition, the expenditures in the reports contained errors of reporting related to the amounts for employee retentions for payroll taxes, which were included in the reports but are not expenditures incurred by the Organization. Cause Weak internal controls over the reporting process, including a lack of formalized oversight and monitoring mechanisms to ensure timely and accurate submission. Effect As a result of this condition, the grantor may issue warnings and/or impose penalties to the Organization. Also, the grantor was deprived of timely taking any action that it understood to be pertinent in the program. The analysis, evaluations, and decision-making of the grantee could be affected. Context Of a total of twenty-four (24) bi-weekly reports required for ALN 21.027, four (4) of the bi-weekly reports submitted were sent after their due date. In addition, all the reports sent to the oversight agency included the FICA and Medicare retention made the by Organization to employees participating on the program, which do not constitute expenditures made by the Organization. Resolution applicability Biweekly report due date Report Submission Date Days over due Date Res 2022-052, 2023-113 7/21/2023 7/28/2023 7 Res 2022-052, 2023-113 7/7/2023 7/14/2023 7 Res 2022-052, 2023-113 8/4/2023 8/11/2023 7 Res 2022-052, 2023-113 8/18/2023 8/25/2023 7 Identification of Repeat Finding This is not a repeat finding. Questioned Cost None. The FICA and Medicare retentions were wrongly reported on the bi-weekly reports but they were not claimed as federal expenditures by the Organization nor are included in the SEFA. Recommendation We strongly recommend the Organization to institute policies and procedures that stipulate the specific tasks and the personnel in charge of filing the required reports. Also, the policies and procedures should designate the member of management in charge of monitoring the compliance with the reporting requirements in order to make sure that the Organization is filing the reports by their respective due dates and with the correct amounts. It is critically important that timely and accurate reports be produced to ensure that the goals and purposes of the grant have been achieved and accounted for properly.
Criteria or Specific Requirement Per 2 CFR 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Institutions are required to report enrollment information under the Pell grant and the Direct and FFEL loan programs via the National Student Loan Data System (NSLDS) (OMB No. 1845-0035). Although FFEL loans are no longer made or a part of the SFA Cluster, a student may have a FFEL loan from previous years that would require enrollment reporting for that student (Pell, 34 CFR 690.83(b)(2); FFEL, 34 CFR 682.610; Direct Loan, 34 CFR 685.309; Perkins 34 CFR 674.19(f)). The administration of the Title IV programs depends heavily on the accuracy and timeliness of the enrollment information reported by institutions. Institutions must review, update, and certify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website which the financial aid administrator can access for the auditor. The data on the institution’s Enrollment Reporting Roster, or Enrollment Maintenance page, is what NSLDS has as the most recently certified enrollment. There are two categories of enrollment information, “Campus Level” and “Program Level,” both of which need to be reported accurately and have separate record types. Condition Found Of the 40 students selected for enrollment reporting testing, 3 students who had graduated from the University did not have the proper Graduation (G) status submitted to the NSLDS. This finding was identified in the prior year and management implemented a process as part of their corrective action plan from the fiscal year 2023 audit to remediate this condition. This implementation was completed in May 2024. All three students identified above were included in the period prior to the implementation. No conditions were found subsequent to May 2024. Cause and Possible Asserted Effect The University transmits student status changes to the National Student Clearinghouse (NSC) who then transmits the changes to the NSLDS. The University was submitting the status changes to the NSC, but these changes were sent back to the University on a Graduation Not Reported listing by the NSLDS. The University did not follow-up on these returned items in a timely manner. Questioned Costs None. Whether the Sample Was a Statistically Valid Sample The sample was not intended to be, and was not, a statistically valid sample. Identification of Whether the Audit Finding Was a Repeat Finding in the Immediately Prior Audit Yes, finding 2023-002. Recommendation We recommend the University continue to monitor its controls surrounding the review of student status changes that were not reported or were returned to ensure enrollment reporting requirements are accurately completed in a timely manner. View of Responsible Officials As noted, the three records identified in the fiscal year 2024 audit preceded full implementation of the fiscal year 2023 audit corrective action plan. The University continues to prioritize enhancement of its internal controls, including tighter procedures to ensure timely and accurate reporting. Additionally, not only has the Registrar’s Office instituted periodic internal reviews to ensure that the enrollment and graduation reporting process meet required standards, a duplicative review process for Worldwide enrollment and graduation report submissions has been operationalized.
Criteria or Specific Requirement Per 2 CFR 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Institutions are required to report enrollment information under the Pell grant and the Direct and FFEL loan programs via the National Student Loan Data System (NSLDS) (OMB No. 1845-0035). Although FFEL loans are no longer made or a part of the SFA Cluster, a student may have a FFEL loan from previous years that would require enrollment reporting for that student (Pell, 34 CFR 690.83(b)(2); FFEL, 34 CFR 682.610; Direct Loan, 34 CFR 685.309; Perkins 34 CFR 674.19(f)). The administration of the Title IV programs depends heavily on the accuracy and timeliness of the enrollment information reported by institutions. Institutions must review, update, and certify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website which the financial aid administrator can access for the auditor. The data on the institution’s Enrollment Reporting Roster, or Enrollment Maintenance page, is what NSLDS has as the most recently certified enrollment. There are two categories of enrollment information, “Campus Level” and “Program Level,” both of which need to be reported accurately and have separate record types. Condition Found Of the 40 students selected for enrollment reporting testing, 3 students who had graduated from the University did not have the proper Graduation (G) status submitted to the NSLDS. This finding was identified in the prior year and management implemented a process as part of their corrective action plan from the fiscal year 2023 audit to remediate this condition. This implementation was completed in May 2024. All three students identified above were included in the period prior to the implementation. No conditions were found subsequent to May 2024. Cause and Possible Asserted Effect The University transmits student status changes to the National Student Clearinghouse (NSC) who then transmits the changes to the NSLDS. The University was submitting the status changes to the NSC, but these changes were sent back to the University on a Graduation Not Reported listing by the NSLDS. The University did not follow-up on these returned items in a timely manner. Questioned Costs None. Whether the Sample Was a Statistically Valid Sample The sample was not intended to be, and was not, a statistically valid sample. Identification of Whether the Audit Finding Was a Repeat Finding in the Immediately Prior Audit Yes, finding 2023-002. Recommendation We recommend the University continue to monitor its controls surrounding the review of student status changes that were not reported or were returned to ensure enrollment reporting requirements are accurately completed in a timely manner. View of Responsible Officials As noted, the three records identified in the fiscal year 2024 audit preceded full implementation of the fiscal year 2023 audit corrective action plan. The University continues to prioritize enhancement of its internal controls, including tighter procedures to ensure timely and accurate reporting. Additionally, not only has the Registrar’s Office instituted periodic internal reviews to ensure that the enrollment and graduation reporting process meet required standards, a duplicative review process for Worldwide enrollment and graduation report submissions has been operationalized.
Finding 2024-007 – Reporting Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number (ALN): 21.027 Federal Agency: U.S. Department of the Treasury Grant Year: 2023 Criteria In accordance with 2 CFR §200.303, the City is required to establish and maintain effective internal controls over federal awards to ensure accurate and timely reporting of expenditures in compliance with federal regulations. Additionally, 2 CFR §200.327 and the terms of the award require timely and accurate submission of required reports. Condition The City did not submit the required federal financial reports in a timely basis. Additionally, the amounts reported in the SLFRF Compliance Report – WY4581 – P&E Report – 2024 included encumbered amounts rather than actual expenditures incurred during the reporting period. Cause The City does not have adequate internal controls in place to ensure the timely preparation, reconciliation, review, and submission of required reports for federal awards. Additionally, turnover in key personnel during the reporting period contributed to these issues, as new staff did not have access to the proper login credentials or training necessary to prepare and submit reports timely and accurately. There was also no established process for reconciling reported expenditures to the City’s general ledger and supporting documentation prior to submission. Effect or Potential Effect As a result of the lack of internal controls and reconciliation procedures, the City submitted inaccurate and untimely financial reports. Reporting encumbrances instead of actual expenditures misrepresents program activity and may impact the City’s compliance with federal requirements. Continued inaccuracies could result in questioned costs, increased oversight by federal agencies, or delays in future funding. Questioned Costs None noted, as expenditures were ultimately supported by documentation; however, the reporting inaccuracies are considered a significant deficiency in internal control over compliance. Context The State and Local Fiscal Recovery Funds (SLFRF) program, established under the American Rescue Plan Act, provides significant funding to municipalities for pandemic recovery and infrastructure initiatives. Accurate and timely reporting of expenditures is not only a regulatory requirement but also essential for transparency, accountability, and continued eligibility for funding. Internal control deficiencies in reporting may compromise the City’s ability to demonstrate effective stewardship of federal funds and could trigger additional scrutiny, audits, or corrective action plans from federal agencies. Given the substantial financial and operational impact of SLFRF funds on the City’s budget and community initiatives, it is imperative that robust processes are in place to ensure reports reflect actual expenditures and are reconciled to the City’s general ledger. Strengthening these controls will protect the City from potential compliance risks, maintain public trust, and ensure uninterrupted access to federal resources critical for ongoing community projects. Identification as a Repeat Finding This is a new finding for the fiscal year ended June 30, 2024. Recommendation We recommend that the City develop and implement formal policies and procedures to ensure timely preparation, reconciliation, and submission of all federal reports. Management should assign clear oversight responsibility for federal reporting and establish a formal reconciliation process requiring that all reported amounts be reviewed and compared to the City’s accounting records and supporting documentation prior to submission. Additionally, procedures should be developed to ensure that login credentials and system access for federal reporting platforms are promptly updated and assigned during periods of staff turnover. Views of Responsible Officials The City concurs with the finding. The City will implement new internal control procedures by June 30, 2025, to ensure timely submission and reconciliation of federal reports and the Treasurer will review and approve all submissions prior to filing. See Corrective Action Plan.
Finding 2024-006 – Allowable Costs/Cost Principles Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number (ALN): 21.027 Federal Agency: U.S. Department of the Treasury Pass-Through Grantor: Wyoming Office of State Lands and Investments (OSLI) Grant Year: 2024 Criteria In accordance with 2 CFR 200.403(a) and (f), federal expenditures must: • Be necessary, reasonable, and allocable to the specific federal award under which they are charged. • Not be included as an expenditure or used to meet cost-sharing requirements of another federally financed program in the current or prior period. Further, per 2 CFR 200.303 and the State and Local Fiscal Recovery Funds (SLFRF) Compliance and Reporting Guidance, recipients are required to: • Maintain accounting records that support accurate, compliant financial data. • Develop and implement internal controls to ensure that expenditures charged to SLFRF funding are eligible, properly documented, and not duplicated across funding sources. • Submit accurate Project and Expenditure Reports and ensure that funds passed through from other entities are properly identified and reported. These requirements collectively emphasize that expenditures must be tracked and reported separately by distinct grant award, even when received under the same Assistance Listing number, to prevent double reimbursement and misstatement of federal expenditures. Condition The City received two separate funding sources under Assistance Listing Number 21.027 (SLFRF): 1. A direct SLFRF award from the U.S. Department of the Treasury; and 2. A pass-through SLFRF award from the Wyoming State Lands and Investments (OSLI). During our testing of expenditures charged to the OSLI-administered SLFRF grant in fiscal year 2024, we identified one instance where the City submitted and received reimbursement for an expenditure of $50,744. The City previously had applied this same expenditure toward advance funding received under the direct SLFRF award from the U.S. Department of the Treasury in 2023. This resulted in a duplicate reimbursement of $50,744, constituting an unallowable cost under federal cost principles and SLFRF compliance requirements. Cause The duplication occurred due to turnover in key personnel and insufficient internal controls to reconcile prior advance-funded expenditures against current-year reimbursement requests. Additionally, the City does not have adequate procedures to track and allocate costs separately by individual SLFRF award or review SEFA preparation and grant reimbursement submissions for potential duplication of expenditures across funding sources under the same ALN. Effect or Potential Effect As a result of this deficiency, the City received duplicate reimbursement in the amount of $50,744, resulting in an unallowable cost that may require repayment or other corrective action. Inaccurate reporting of federal expenditures on the Schedule of Expenditures of Federal Awards (SEFA) could lead to scrutiny from the federal grantor and require amendments or adjustments. This exposes the City to potential federal grantor review and the risk of losing eligibility for future federal funding if repeated noncompliance is identified or corrective actions are not implemented. Questioned Costs $50,744 Context During our testing of Allowable Costs/Cost Principles of expenditures charged to the SLFRF grant administered by the State Lands and Investments (OSLI), we identified one instance out of twenty-two tested, where the City submitted and received reimbursement for an expenditure that had already been previously applied to advance funding received under the direct SLFRF award from the U.S. Department of the Treasury in a prior period. Although both funding streams fall under Assistance Listing 21.027, they are separate awards with distinct reporting and compliance requirements. Federal regulations require that costs be tracked and reported by individual grant award to prevent duplication of reimbursements and improper reporting. Identification as a Repeat Finding This is a new finding for the fiscal year ended June 30, 2024. Recommendation We recommend that the City implement internal controls to prevent expenditures reimbursed under one grant from being resubmitted for reimbursement under a separate grant award. The City should establish and maintain separate tracking systems for each distinct grant award, including reconciliation of prior expenditures before submitting new reimbursement requests. A secondary review of all grant reimbursement requests and SEFA preparation should be required to ensure proper cost allocation and compliance with federal regulations. Furthermore, the City should consult with the State Lands and Investments to determine the necessary corrective action regarding the $50,744 questioned cost, including potential repayment. Finally, management should provide training to all personnel involved in federal grant administration to ensure understanding of cost principles, award-specific tracking requirements, and federal reporting expectations. Views of Responsible Officials Management concurs with the finding and acknowledges the deficiency in internal controls and cost allocation. The City will strengthen its internal reconciliation procedures, implement secondary reviews for all grant reimbursement submissions, and establish distinct tracking mechanisms for each SLFRF award. In addition, management will consult with the State Lands and Investments regarding the questioned cost and ensure any necessary corrective actions are taken. Staff training will be provided to improve awareness and compliance with federal grant requirements going forward. See Corrective Action Plan.
FINDING 2024-003 Subject: Title I Grants to Local Educational Agencies - Special Tests and Provisions - Assessment System Security Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): 22611-001-P01, 23611-001-P01, 24611-001-P01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Assessment System Security Audit Findings: Material Weakness, Other Matters Condition and Context State Educational Agencies (SEA), in consultation with Local Educational Agencies (LEA), are required to establish and maintain an assessment security system that is valid, reliable, and consistent with relevant professional and technical standards. Within their assessment system, SEAs must have policies and procedures to maintain test security measures and ensure that LEAs implement those policies and procedures. As such, the Indiana Department of Education created and published the Indiana Assessments Policy Manual. As a part of the assessment security, any individual who administers, handles, or has access to secure test materials at the school or School Corporation, shall complete assessment training and sign a testing security and integrity statement that remains on file in the appropriate building-level office each year. Each individual required to sign the testing integrity agreement, shall sign the form by an established date. Due to the lack of Internal controls over supporting documentation, 32 of the 40 employees selected for testing did not have the testing security and integrity statement retained for audit purposes. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 511 IAC 5-5-5(b) states: "Any individual who administers, handles, or has access to secure test materials at the school or school corporation shall complete assessment training and sign a testing security and integrity agreement to remain on file in the appropriate building-level office each year." INDIANA STATE BOARD OF ACCOUNTS 21 WHITKO COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Upon inquiry of the School Corporation, it was determined that an employee who is no longer employed by the School Corporation was responsible for storing the Indiana Testing Security and Integrity Agreements. The School Corporation was unable to locate the prior employee's files. The School Corporation was able to obtain the Agreements for one building for both years and one building for the second year of the audit period. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Someone administrating testing, that has not signed the security and integrity agreement, could possibly not follow security properly and the testing integrity could be compromised. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure that all required employees complete assessment security training and sign the appropriate forms and retain those forms for audit. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 Subject: Title I Grants to Local Educational Agencies - Special Tests and Provisions - Assessment System Security Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): 22611-001-P01, 23611-001-P01, 24611-001-P01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Assessment System Security Audit Findings: Material Weakness, Other Matters Condition and Context State Educational Agencies (SEA), in consultation with Local Educational Agencies (LEA), are required to establish and maintain an assessment security system that is valid, reliable, and consistent with relevant professional and technical standards. Within their assessment system, SEAs must have policies and procedures to maintain test security measures and ensure that LEAs implement those policies and procedures. As such, the Indiana Department of Education created and published the Indiana Assessments Policy Manual. As a part of the assessment security, any individual who administers, handles, or has access to secure test materials at the school or School Corporation, shall complete assessment training and sign a testing security and integrity statement that remains on file in the appropriate building-level office each year. Each individual required to sign the testing integrity agreement, shall sign the form by an established date. Due to the lack of Internal controls over supporting documentation, 32 of the 40 employees selected for testing did not have the testing security and integrity statement retained for audit purposes. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 511 IAC 5-5-5(b) states: "Any individual who administers, handles, or has access to secure test materials at the school or school corporation shall complete assessment training and sign a testing security and integrity agreement to remain on file in the appropriate building-level office each year." INDIANA STATE BOARD OF ACCOUNTS 21 WHITKO COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Upon inquiry of the School Corporation, it was determined that an employee who is no longer employed by the School Corporation was responsible for storing the Indiana Testing Security and Integrity Agreements. The School Corporation was unable to locate the prior employee's files. The School Corporation was able to obtain the Agreements for one building for both years and one building for the second year of the audit period. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Someone administrating testing, that has not signed the security and integrity agreement, could possibly not follow security properly and the testing integrity could be compromised. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure that all required employees complete assessment security training and sign the appropriate forms and retain those forms for audit. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
2024-005 Community Development Block Grants, ALN 14.218 Federal Award Identification Number and Year: B-23-MC-25-0019, 2024 Award Period: July 1, 2023 through June 30, 2024 Compliance Requirement: Reporting Criteria or Specific Requirement: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. Per 2 CFR section 200.303(a), a non-federal entity must: Establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Such internal control encompasses compliance with reporting requirements of the federal award. Condition and Context: For one of three subawards tested in our statistically valid sample, the City did not provide documentation supporting the reporting of the subaward to FSRS in accordance with FFATA requirements. For both of the two PR29 CDBG Cash on Hand Quarterly Reports tested in our statistically valid sample, the City improperly calculated the beginning cash on hand at $0.00. Questioned Costs: None. Cause: Procedures were not implemented effectively to ensure the required reports were completed and submitted in accordance with the terms and conditions of the federal award. Effect: Noncompliance occurred as these reports were not completed and processed in accordance with federal award requirements. Repeat Finding: No. Recommendation: We recommend procedures be strengthened to ensure federally required reports are completed and processed in accordance with the requirements of the federal awards. Views of Responsible Officials: Management agrees with the finding.
FINDING 2024-004 Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Material Weakness Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Eligibility compliance requirement. Any child enrolled in a participating school who meets the applicable program's definition of "child," may receive meals under the applicable programs. A child belonging to households meeting nationwide income eligibility requirements may receive meals at no charge or at a reduced price. Children that have been determined ineligible for free or reduced-price meals pay the full price for their meals. A child's eligibility for free and reduced-priced meals under a Child Nutrition Cluster program may be established by the submission of an annual application or statement which furnished such information as family income and family size. The School Corporation determines eligibility by comparing the data reported by the child's household to published income eligibility guidelines. Annual eligibility determinations may also be based on the child's household receiving benefits under SNAP, FDPIR, the Head Start Program, or, under most circumstances, the TANF program. A household may furnish documentation if its participation in one of those programs, or the School Corporation may obtain the information directly from the State or local agency that administers those programs. Certain foster, runaway, homeless, and migrant children are categorically eligible for free school lunches and breakfasts. Direct certified households do not need to complete an application. Annually, the School Corporation obtained a Direct Certifications file from the CNC Web Portal and uploaded the file into the School Corporation's software without a documented oversight or review process in place to ensure directly certified students were properly processed. The lack of internal controls over directly certified students was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 21 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause A proper system of internal controls, which would include segregation of key functions, was not implemented by management of the School Corporation over directly certified students. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls, including segregation of duties, related to the grant agreement and the Eligibility compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-004 Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Material Weakness Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Eligibility compliance requirement. Any child enrolled in a participating school who meets the applicable program's definition of "child," may receive meals under the applicable programs. A child belonging to households meeting nationwide income eligibility requirements may receive meals at no charge or at a reduced price. Children that have been determined ineligible for free or reduced-price meals pay the full price for their meals. A child's eligibility for free and reduced-priced meals under a Child Nutrition Cluster program may be established by the submission of an annual application or statement which furnished such information as family income and family size. The School Corporation determines eligibility by comparing the data reported by the child's household to published income eligibility guidelines. Annual eligibility determinations may also be based on the child's household receiving benefits under SNAP, FDPIR, the Head Start Program, or, under most circumstances, the TANF program. A household may furnish documentation if its participation in one of those programs, or the School Corporation may obtain the information directly from the State or local agency that administers those programs. Certain foster, runaway, homeless, and migrant children are categorically eligible for free school lunches and breakfasts. Direct certified households do not need to complete an application. Annually, the School Corporation obtained a Direct Certifications file from the CNC Web Portal and uploaded the file into the School Corporation's software without a documented oversight or review process in place to ensure directly certified students were properly processed. The lack of internal controls over directly certified students was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 21 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause A proper system of internal controls, which would include segregation of key functions, was not implemented by management of the School Corporation over directly certified students. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls, including segregation of duties, related to the grant agreement and the Eligibility compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-004 Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Material Weakness Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Eligibility compliance requirement. Any child enrolled in a participating school who meets the applicable program's definition of "child," may receive meals under the applicable programs. A child belonging to households meeting nationwide income eligibility requirements may receive meals at no charge or at a reduced price. Children that have been determined ineligible for free or reduced-price meals pay the full price for their meals. A child's eligibility for free and reduced-priced meals under a Child Nutrition Cluster program may be established by the submission of an annual application or statement which furnished such information as family income and family size. The School Corporation determines eligibility by comparing the data reported by the child's household to published income eligibility guidelines. Annual eligibility determinations may also be based on the child's household receiving benefits under SNAP, FDPIR, the Head Start Program, or, under most circumstances, the TANF program. A household may furnish documentation if its participation in one of those programs, or the School Corporation may obtain the information directly from the State or local agency that administers those programs. Certain foster, runaway, homeless, and migrant children are categorically eligible for free school lunches and breakfasts. Direct certified households do not need to complete an application. Annually, the School Corporation obtained a Direct Certifications file from the CNC Web Portal and uploaded the file into the School Corporation's software without a documented oversight or review process in place to ensure directly certified students were properly processed. The lack of internal controls over directly certified students was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 21 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause A proper system of internal controls, which would include segregation of key functions, was not implemented by management of the School Corporation over directly certified students. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls, including segregation of duties, related to the grant agreement and the Eligibility compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-004 Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Material Weakness Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Eligibility compliance requirement. Any child enrolled in a participating school who meets the applicable program's definition of "child," may receive meals under the applicable programs. A child belonging to households meeting nationwide income eligibility requirements may receive meals at no charge or at a reduced price. Children that have been determined ineligible for free or reduced-price meals pay the full price for their meals. A child's eligibility for free and reduced-priced meals under a Child Nutrition Cluster program may be established by the submission of an annual application or statement which furnished such information as family income and family size. The School Corporation determines eligibility by comparing the data reported by the child's household to published income eligibility guidelines. Annual eligibility determinations may also be based on the child's household receiving benefits under SNAP, FDPIR, the Head Start Program, or, under most circumstances, the TANF program. A household may furnish documentation if its participation in one of those programs, or the School Corporation may obtain the information directly from the State or local agency that administers those programs. Certain foster, runaway, homeless, and migrant children are categorically eligible for free school lunches and breakfasts. Direct certified households do not need to complete an application. Annually, the School Corporation obtained a Direct Certifications file from the CNC Web Portal and uploaded the file into the School Corporation's software without a documented oversight or review process in place to ensure directly certified students were properly processed. The lack of internal controls over directly certified students was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 21 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause A proper system of internal controls, which would include segregation of key functions, was not implemented by management of the School Corporation over directly certified students. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls, including segregation of duties, related to the grant agreement and the Eligibility compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-004 Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Material Weakness Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Eligibility compliance requirement. Any child enrolled in a participating school who meets the applicable program's definition of "child," may receive meals under the applicable programs. A child belonging to households meeting nationwide income eligibility requirements may receive meals at no charge or at a reduced price. Children that have been determined ineligible for free or reduced-price meals pay the full price for their meals. A child's eligibility for free and reduced-priced meals under a Child Nutrition Cluster program may be established by the submission of an annual application or statement which furnished such information as family income and family size. The School Corporation determines eligibility by comparing the data reported by the child's household to published income eligibility guidelines. Annual eligibility determinations may also be based on the child's household receiving benefits under SNAP, FDPIR, the Head Start Program, or, under most circumstances, the TANF program. A household may furnish documentation if its participation in one of those programs, or the School Corporation may obtain the information directly from the State or local agency that administers those programs. Certain foster, runaway, homeless, and migrant children are categorically eligible for free school lunches and breakfasts. Direct certified households do not need to complete an application. Annually, the School Corporation obtained a Direct Certifications file from the CNC Web Portal and uploaded the file into the School Corporation's software without a documented oversight or review process in place to ensure directly certified students were properly processed. The lack of internal controls over directly certified students was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 21 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause A proper system of internal controls, which would include segregation of key functions, was not implemented by management of the School Corporation over directly certified students. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls, including segregation of duties, related to the grant agreement and the Eligibility compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-004 Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Material Weakness Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Eligibility compliance requirement. Any child enrolled in a participating school who meets the applicable program's definition of "child," may receive meals under the applicable programs. A child belonging to households meeting nationwide income eligibility requirements may receive meals at no charge or at a reduced price. Children that have been determined ineligible for free or reduced-price meals pay the full price for their meals. A child's eligibility for free and reduced-priced meals under a Child Nutrition Cluster program may be established by the submission of an annual application or statement which furnished such information as family income and family size. The School Corporation determines eligibility by comparing the data reported by the child's household to published income eligibility guidelines. Annual eligibility determinations may also be based on the child's household receiving benefits under SNAP, FDPIR, the Head Start Program, or, under most circumstances, the TANF program. A household may furnish documentation if its participation in one of those programs, or the School Corporation may obtain the information directly from the State or local agency that administers those programs. Certain foster, runaway, homeless, and migrant children are categorically eligible for free school lunches and breakfasts. Direct certified households do not need to complete an application. Annually, the School Corporation obtained a Direct Certifications file from the CNC Web Portal and uploaded the file into the School Corporation's software without a documented oversight or review process in place to ensure directly certified students were properly processed. The lack of internal controls over directly certified students was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 21 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause A proper system of internal controls, which would include segregation of key functions, was not implemented by management of the School Corporation over directly certified students. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls, including segregation of duties, related to the grant agreement and the Eligibility compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Programs: COVID-19 - Special Education Grants to States, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027X, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-042-ARP, 22619-042-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 22 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation is a member of the Northeast Indiana Special Education Cooperative (Cooperative). During fiscal years 2022-2023 and 2023-2024, the Cooperative operated the special education program and spent the federal money on behalf of all its members. As the grant agreement was between the Indiana Department of Education and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the procurement and the suspension and debarment requirements. The Cooperative did not have adequate procedures in place to ensure that the requirements for the simplified acquisition threshold and for small purchases were met for each applicable procured good or service or to ensure that vendors were not suspended or debarred prior to entering into a covered transaction. Procurement When the value of the procurement for property or services exceeds the simplified acquisition threshold (SAT), or a lower threshold established by a nonfederal entity, formal procurement methods are required. The SAT is typically set at $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold. Therefore, the SAT threshold is set at $150,000. Formal procurement methods require adherence to documented procedures and formal methods such as sealed bids or proposals. When the purchase value exceeds the micro-purchase threshold but is less than the simplified acquisition threshold, a small purchase occurs. Small purchases require documented full and open competition or a documented rationale for limited competition. For 2022-2023, the Cooperative had one vendor, with disbursements totaling $379,313, which exceeded the SAT threshold of $150,000. The Cooperative did not obtain sealed bids or competitive proposals nor was there documentation detailing the history of the procurement, which must include the reason for the procurement method used. For 2022-2023, the Cooperative had one vendor with disbursements in the amount of $55,374, which were less than the SAT threshold of $150,000 but exceeded the $50,000 micro-purchase threshold and was selected for testing. The Cooperative did not obtain price or rate quotes nor was there documentation detailing the history of the procurement, which must include the reason for the procurement method used. For 2023-2024, three vendors with disbursements totaling $175,125 were identified as being less than the simplified acquisition threshold of $150,000 but exceeding the $50,000 micropurchase threshold and were selected for testing. The Cooperative did not obtain price or rate quotes for two of the three vendors, and there was no documentation detailing the history of the procurement, which must include the reason for the procurement method used. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAM exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. INDIANA STATE BOARD OF ACCOUNTS 23 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Upon inquiry of the Cooperative in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the Cooperative disclosed there were not any documented internal controls or procedures. Nine covered transactions were identified. The covered transactions totaling $803,836 were selected for testing. The Cooperative did not verify the suspension and debarment status of the tested vendors prior to payment. The lack of internal controls and noncompliance were systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . . INDIANA STATE BOARD OF ACCOUNTS 24 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (b) Formal Procurement Methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: . . . (1) Sealed bids. A procurement method in which bids are publicly solicited and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. The sealed bids method is the preferred method for procuring construction, if the conditions. . . . (2) Proposals. A procurement method in which either a fixed price or costreimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person as the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause The Cooperative noted that the ARP portion of the Special Education grant was new for 2022-2023 and 2023-2024. The ARP funding gave opportunity for types of expenditures that do not typically get expensed using Special Education funding. The transactions noted within the Condition and Context were from the ARP portion of the grant, which provided property or services that exceeded the micro-purchase threshold. Management of the Cooperative was unaware of the procurement requirements when property or services exceed the micro-purchase threshold. In addition, management of the Cooperative was unaware of the suspension and debarment requirements when a covered transaction is expected to equal or exceed $25,000. Effect Without the proper implementation of an effectively designed system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Without following the required methods for procurement, the Cooperative could be overpaying for services. Unverified vendors to whom payments equal to or in excess of $25,000 could be suspended, debarred, or otherwise excluded. INDIANA STATE BOARD OF ACCOUNTS 25 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Noncompliance with the provisions of federal statutes, regulations, and terms and conditions of the federal award could result in the reduction of future federal funding to the Cooperative. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the Cooperative's management design and implement a system of internal controls related to procurement and suspension and debarment procedures to ensure procurement requirements are met and to ensure entities are neither suspended nor debarred or otherwise excluded or disqualified prior to entering into any covered transactions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Programs: COVID-19 - Special Education Grants to States, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027X, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-042-ARP, 22619-042-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 22 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation is a member of the Northeast Indiana Special Education Cooperative (Cooperative). During fiscal years 2022-2023 and 2023-2024, the Cooperative operated the special education program and spent the federal money on behalf of all its members. As the grant agreement was between the Indiana Department of Education and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the procurement and the suspension and debarment requirements. The Cooperative did not have adequate procedures in place to ensure that the requirements for the simplified acquisition threshold and for small purchases were met for each applicable procured good or service or to ensure that vendors were not suspended or debarred prior to entering into a covered transaction. Procurement When the value of the procurement for property or services exceeds the simplified acquisition threshold (SAT), or a lower threshold established by a nonfederal entity, formal procurement methods are required. The SAT is typically set at $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold. Therefore, the SAT threshold is set at $150,000. Formal procurement methods require adherence to documented procedures and formal methods such as sealed bids or proposals. When the purchase value exceeds the micro-purchase threshold but is less than the simplified acquisition threshold, a small purchase occurs. Small purchases require documented full and open competition or a documented rationale for limited competition. For 2022-2023, the Cooperative had one vendor, with disbursements totaling $379,313, which exceeded the SAT threshold of $150,000. The Cooperative did not obtain sealed bids or competitive proposals nor was there documentation detailing the history of the procurement, which must include the reason for the procurement method used. For 2022-2023, the Cooperative had one vendor with disbursements in the amount of $55,374, which were less than the SAT threshold of $150,000 but exceeded the $50,000 micro-purchase threshold and was selected for testing. The Cooperative did not obtain price or rate quotes nor was there documentation detailing the history of the procurement, which must include the reason for the procurement method used. For 2023-2024, three vendors with disbursements totaling $175,125 were identified as being less than the simplified acquisition threshold of $150,000 but exceeding the $50,000 micropurchase threshold and were selected for testing. The Cooperative did not obtain price or rate quotes for two of the three vendors, and there was no documentation detailing the history of the procurement, which must include the reason for the procurement method used. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAM exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. INDIANA STATE BOARD OF ACCOUNTS 23 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Upon inquiry of the Cooperative in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the Cooperative disclosed there were not any documented internal controls or procedures. Nine covered transactions were identified. The covered transactions totaling $803,836 were selected for testing. The Cooperative did not verify the suspension and debarment status of the tested vendors prior to payment. The lack of internal controls and noncompliance were systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . . INDIANA STATE BOARD OF ACCOUNTS 24 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (b) Formal Procurement Methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: . . . (1) Sealed bids. A procurement method in which bids are publicly solicited and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. The sealed bids method is the preferred method for procuring construction, if the conditions. . . . (2) Proposals. A procurement method in which either a fixed price or costreimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person as the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause The Cooperative noted that the ARP portion of the Special Education grant was new for 2022-2023 and 2023-2024. The ARP funding gave opportunity for types of expenditures that do not typically get expensed using Special Education funding. The transactions noted within the Condition and Context were from the ARP portion of the grant, which provided property or services that exceeded the micro-purchase threshold. Management of the Cooperative was unaware of the procurement requirements when property or services exceed the micro-purchase threshold. In addition, management of the Cooperative was unaware of the suspension and debarment requirements when a covered transaction is expected to equal or exceed $25,000. Effect Without the proper implementation of an effectively designed system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Without following the required methods for procurement, the Cooperative could be overpaying for services. Unverified vendors to whom payments equal to or in excess of $25,000 could be suspended, debarred, or otherwise excluded. INDIANA STATE BOARD OF ACCOUNTS 25 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Noncompliance with the provisions of federal statutes, regulations, and terms and conditions of the federal award could result in the reduction of future federal funding to the Cooperative. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the Cooperative's management design and implement a system of internal controls related to procurement and suspension and debarment procedures to ensure procurement requirements are met and to ensure entities are neither suspended nor debarred or otherwise excluded or disqualified prior to entering into any covered transactions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Programs: COVID-19 - Special Education Grants to States, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027X, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-042-ARP, 22619-042-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 22 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation is a member of the Northeast Indiana Special Education Cooperative (Cooperative). During fiscal years 2022-2023 and 2023-2024, the Cooperative operated the special education program and spent the federal money on behalf of all its members. As the grant agreement was between the Indiana Department of Education and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the procurement and the suspension and debarment requirements. The Cooperative did not have adequate procedures in place to ensure that the requirements for the simplified acquisition threshold and for small purchases were met for each applicable procured good or service or to ensure that vendors were not suspended or debarred prior to entering into a covered transaction. Procurement When the value of the procurement for property or services exceeds the simplified acquisition threshold (SAT), or a lower threshold established by a nonfederal entity, formal procurement methods are required. The SAT is typically set at $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold. Therefore, the SAT threshold is set at $150,000. Formal procurement methods require adherence to documented procedures and formal methods such as sealed bids or proposals. When the purchase value exceeds the micro-purchase threshold but is less than the simplified acquisition threshold, a small purchase occurs. Small purchases require documented full and open competition or a documented rationale for limited competition. For 2022-2023, the Cooperative had one vendor, with disbursements totaling $379,313, which exceeded the SAT threshold of $150,000. The Cooperative did not obtain sealed bids or competitive proposals nor was there documentation detailing the history of the procurement, which must include the reason for the procurement method used. For 2022-2023, the Cooperative had one vendor with disbursements in the amount of $55,374, which were less than the SAT threshold of $150,000 but exceeded the $50,000 micro-purchase threshold and was selected for testing. The Cooperative did not obtain price or rate quotes nor was there documentation detailing the history of the procurement, which must include the reason for the procurement method used. For 2023-2024, three vendors with disbursements totaling $175,125 were identified as being less than the simplified acquisition threshold of $150,000 but exceeding the $50,000 micropurchase threshold and were selected for testing. The Cooperative did not obtain price or rate quotes for two of the three vendors, and there was no documentation detailing the history of the procurement, which must include the reason for the procurement method used. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAM exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. INDIANA STATE BOARD OF ACCOUNTS 23 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Upon inquiry of the Cooperative in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the Cooperative disclosed there were not any documented internal controls or procedures. Nine covered transactions were identified. The covered transactions totaling $803,836 were selected for testing. The Cooperative did not verify the suspension and debarment status of the tested vendors prior to payment. The lack of internal controls and noncompliance were systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . . INDIANA STATE BOARD OF ACCOUNTS 24 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (b) Formal Procurement Methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: . . . (1) Sealed bids. A procurement method in which bids are publicly solicited and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. The sealed bids method is the preferred method for procuring construction, if the conditions. . . . (2) Proposals. A procurement method in which either a fixed price or costreimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person as the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause The Cooperative noted that the ARP portion of the Special Education grant was new for 2022-2023 and 2023-2024. The ARP funding gave opportunity for types of expenditures that do not typically get expensed using Special Education funding. The transactions noted within the Condition and Context were from the ARP portion of the grant, which provided property or services that exceeded the micro-purchase threshold. Management of the Cooperative was unaware of the procurement requirements when property or services exceed the micro-purchase threshold. In addition, management of the Cooperative was unaware of the suspension and debarment requirements when a covered transaction is expected to equal or exceed $25,000. Effect Without the proper implementation of an effectively designed system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Without following the required methods for procurement, the Cooperative could be overpaying for services. Unverified vendors to whom payments equal to or in excess of $25,000 could be suspended, debarred, or otherwise excluded. INDIANA STATE BOARD OF ACCOUNTS 25 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Noncompliance with the provisions of federal statutes, regulations, and terms and conditions of the federal award could result in the reduction of future federal funding to the Cooperative. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the Cooperative's management design and implement a system of internal controls related to procurement and suspension and debarment procedures to ensure procurement requirements are met and to ensure entities are neither suspended nor debarred or otherwise excluded or disqualified prior to entering into any covered transactions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Programs: COVID-19 - Special Education Grants to States, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027X, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-042-ARP, 22619-042-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 22 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation is a member of the Northeast Indiana Special Education Cooperative (Cooperative). During fiscal years 2022-2023 and 2023-2024, the Cooperative operated the special education program and spent the federal money on behalf of all its members. As the grant agreement was between the Indiana Department of Education and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the procurement and the suspension and debarment requirements. The Cooperative did not have adequate procedures in place to ensure that the requirements for the simplified acquisition threshold and for small purchases were met for each applicable procured good or service or to ensure that vendors were not suspended or debarred prior to entering into a covered transaction. Procurement When the value of the procurement for property or services exceeds the simplified acquisition threshold (SAT), or a lower threshold established by a nonfederal entity, formal procurement methods are required. The SAT is typically set at $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold. Therefore, the SAT threshold is set at $150,000. Formal procurement methods require adherence to documented procedures and formal methods such as sealed bids or proposals. When the purchase value exceeds the micro-purchase threshold but is less than the simplified acquisition threshold, a small purchase occurs. Small purchases require documented full and open competition or a documented rationale for limited competition. For 2022-2023, the Cooperative had one vendor, with disbursements totaling $379,313, which exceeded the SAT threshold of $150,000. The Cooperative did not obtain sealed bids or competitive proposals nor was there documentation detailing the history of the procurement, which must include the reason for the procurement method used. For 2022-2023, the Cooperative had one vendor with disbursements in the amount of $55,374, which were less than the SAT threshold of $150,000 but exceeded the $50,000 micro-purchase threshold and was selected for testing. The Cooperative did not obtain price or rate quotes nor was there documentation detailing the history of the procurement, which must include the reason for the procurement method used. For 2023-2024, three vendors with disbursements totaling $175,125 were identified as being less than the simplified acquisition threshold of $150,000 but exceeding the $50,000 micropurchase threshold and were selected for testing. The Cooperative did not obtain price or rate quotes for two of the three vendors, and there was no documentation detailing the history of the procurement, which must include the reason for the procurement method used. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAM exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. INDIANA STATE BOARD OF ACCOUNTS 23 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Upon inquiry of the Cooperative in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the Cooperative disclosed there were not any documented internal controls or procedures. Nine covered transactions were identified. The covered transactions totaling $803,836 were selected for testing. The Cooperative did not verify the suspension and debarment status of the tested vendors prior to payment. The lack of internal controls and noncompliance were systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . . INDIANA STATE BOARD OF ACCOUNTS 24 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (b) Formal Procurement Methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: . . . (1) Sealed bids. A procurement method in which bids are publicly solicited and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. The sealed bids method is the preferred method for procuring construction, if the conditions. . . . (2) Proposals. A procurement method in which either a fixed price or costreimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person as the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause The Cooperative noted that the ARP portion of the Special Education grant was new for 2022-2023 and 2023-2024. The ARP funding gave opportunity for types of expenditures that do not typically get expensed using Special Education funding. The transactions noted within the Condition and Context were from the ARP portion of the grant, which provided property or services that exceeded the micro-purchase threshold. Management of the Cooperative was unaware of the procurement requirements when property or services exceed the micro-purchase threshold. In addition, management of the Cooperative was unaware of the suspension and debarment requirements when a covered transaction is expected to equal or exceed $25,000. Effect Without the proper implementation of an effectively designed system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Without following the required methods for procurement, the Cooperative could be overpaying for services. Unverified vendors to whom payments equal to or in excess of $25,000 could be suspended, debarred, or otherwise excluded. INDIANA STATE BOARD OF ACCOUNTS 25 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Noncompliance with the provisions of federal statutes, regulations, and terms and conditions of the federal award could result in the reduction of future federal funding to the Cooperative. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the Cooperative's management design and implement a system of internal controls related to procurement and suspension and debarment procedures to ensure procurement requirements are met and to ensure entities are neither suspended nor debarred or otherwise excluded or disqualified prior to entering into any covered transactions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-006 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (IDOE) via JotForm, a form/report builder and excel files. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period, the School Corporation submitted one ESSER I Annual Data Report, two ESSER II Annual Data Reports, and two ESSER III Annual Data Reports, for a total of five reports. There was no documented evidence provided for audit that supported an oversight or review process was in place to prevent, and detect and correct, errors on the five reports. Of the five reports tested, two contained the following errors: ESSER II, Year 3 Annual Data Report Key line items "Addressing Physical Health and Safety Uses: Personnel Services - Benefits" and "Addressing Physical Health and Safety Uses: Supplies" were understated by $19,243 and $664,540, respectively. INDIANA STATE BOARD OF ACCOUNTS 26 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $1,002,932; however, the ledger had total expenses for the award, for that period, of $817,390. ESSER III, Year 3 Annual Data Report Key line items "Mandatory Subgrant Funds - Exclusive of Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Salaries" and "Mandatory Subgrant Funds - Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Benefits" were overstated by $46,500 and $3,500, respectively. Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $2,072,695; however, the ledger had total expenses for the award, for that period, of $2,074,793. The lack in internal controls was systemic throughout the audit period. The noncompliance was isolated to fiscal year 2023-2024. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." INDIANA STATE BOARD OF ACCOUNTS 27 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Due to staffing changes, the documentation for an oversight and review process was not identified and presented for audit. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, errors on reports remained undetected and uncorrected. Noncompliance with the grant agreement and the compliance requirement could result in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-006 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (IDOE) via JotForm, a form/report builder and excel files. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period, the School Corporation submitted one ESSER I Annual Data Report, two ESSER II Annual Data Reports, and two ESSER III Annual Data Reports, for a total of five reports. There was no documented evidence provided for audit that supported an oversight or review process was in place to prevent, and detect and correct, errors on the five reports. Of the five reports tested, two contained the following errors: ESSER II, Year 3 Annual Data Report Key line items "Addressing Physical Health and Safety Uses: Personnel Services - Benefits" and "Addressing Physical Health and Safety Uses: Supplies" were understated by $19,243 and $664,540, respectively. INDIANA STATE BOARD OF ACCOUNTS 26 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $1,002,932; however, the ledger had total expenses for the award, for that period, of $817,390. ESSER III, Year 3 Annual Data Report Key line items "Mandatory Subgrant Funds - Exclusive of Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Salaries" and "Mandatory Subgrant Funds - Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Benefits" were overstated by $46,500 and $3,500, respectively. Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $2,072,695; however, the ledger had total expenses for the award, for that period, of $2,074,793. The lack in internal controls was systemic throughout the audit period. The noncompliance was isolated to fiscal year 2023-2024. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." INDIANA STATE BOARD OF ACCOUNTS 27 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Due to staffing changes, the documentation for an oversight and review process was not identified and presented for audit. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, errors on reports remained undetected and uncorrected. Noncompliance with the grant agreement and the compliance requirement could result in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-006 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (IDOE) via JotForm, a form/report builder and excel files. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period, the School Corporation submitted one ESSER I Annual Data Report, two ESSER II Annual Data Reports, and two ESSER III Annual Data Reports, for a total of five reports. There was no documented evidence provided for audit that supported an oversight or review process was in place to prevent, and detect and correct, errors on the five reports. Of the five reports tested, two contained the following errors: ESSER II, Year 3 Annual Data Report Key line items "Addressing Physical Health and Safety Uses: Personnel Services - Benefits" and "Addressing Physical Health and Safety Uses: Supplies" were understated by $19,243 and $664,540, respectively. INDIANA STATE BOARD OF ACCOUNTS 26 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $1,002,932; however, the ledger had total expenses for the award, for that period, of $817,390. ESSER III, Year 3 Annual Data Report Key line items "Mandatory Subgrant Funds - Exclusive of Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Salaries" and "Mandatory Subgrant Funds - Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Benefits" were overstated by $46,500 and $3,500, respectively. Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $2,072,695; however, the ledger had total expenses for the award, for that period, of $2,074,793. The lack in internal controls was systemic throughout the audit period. The noncompliance was isolated to fiscal year 2023-2024. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." INDIANA STATE BOARD OF ACCOUNTS 27 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Due to staffing changes, the documentation for an oversight and review process was not identified and presented for audit. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, errors on reports remained undetected and uncorrected. Noncompliance with the grant agreement and the compliance requirement could result in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-006 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (IDOE) via JotForm, a form/report builder and excel files. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period, the School Corporation submitted one ESSER I Annual Data Report, two ESSER II Annual Data Reports, and two ESSER III Annual Data Reports, for a total of five reports. There was no documented evidence provided for audit that supported an oversight or review process was in place to prevent, and detect and correct, errors on the five reports. Of the five reports tested, two contained the following errors: ESSER II, Year 3 Annual Data Report Key line items "Addressing Physical Health and Safety Uses: Personnel Services - Benefits" and "Addressing Physical Health and Safety Uses: Supplies" were understated by $19,243 and $664,540, respectively. INDIANA STATE BOARD OF ACCOUNTS 26 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $1,002,932; however, the ledger had total expenses for the award, for that period, of $817,390. ESSER III, Year 3 Annual Data Report Key line items "Mandatory Subgrant Funds - Exclusive of Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Salaries" and "Mandatory Subgrant Funds - Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Benefits" were overstated by $46,500 and $3,500, respectively. Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $2,072,695; however, the ledger had total expenses for the award, for that period, of $2,074,793. The lack in internal controls was systemic throughout the audit period. The noncompliance was isolated to fiscal year 2023-2024. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." INDIANA STATE BOARD OF ACCOUNTS 27 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Due to staffing changes, the documentation for an oversight and review process was not identified and presented for audit. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, errors on reports remained undetected and uncorrected. Noncompliance with the grant agreement and the compliance requirement could result in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 Subject: Special Education Cluster (IDEA) - Matching, Level of Effort, Earmarking Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): H027A200084, H027A210084, H027A220084, H027A230084, H027X210084, H173A200104, H173A210104, H173A220104, H173A230104, H173X210104 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Other Matters Condition and Context Earmarking A portion of the School Corporation's Special Education allocation was required to be set aside for the mandatory Coordinated Early Intervening Services (CEIS) reservation as well as the nonproportionate share reservation. The required amount to be set aside was indicated in the Special Education grant application. The School Corporation is responsible for monitoring each required set aside throughout the life of the grant to ensure the obligation is met. The School Corporation did not separate the earmarking for the mandatory CEIS reservation from the nonpublic proportionate share. The same expenditures in the amount of $2,647 were earmarked in both earmarking categories. In addition, the School Corporation did not have actual expenditure amounts to account for the fiscal year 2021 preschool grant nonproportionate share amount. The expenditures used were a percentage of total expenditures. The School Corporation did have internal controls in place; however, they were not effective in preventing these errors. INDIANA STATE BOARD OF ACCOUNTS 20 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Level of Effort - Individual Transactions (Vendor) The Form 9 (financial) data was submitted by the School Corporation to the Indiana Department of Education (IDOE) semiannually. The data reported included the School Corporation's expenditures recorded during that period. The IDOE calculated Maintenance of Effort based on the expenditure information submitted on the Form 9 for that fiscal year. To verify amounts used by the IDOE in their computation were derived from the ledger of the School Corporation, costs were reviewed to ensure they were recorded properly as to account and object code and reported correctly on the Form 9. In fiscal year 2021, Form 9 testing, 5 out of 25 expenditure codes were not properly supported by the School Corporation's records. In 2022, Form 9 testing, 6 out of 25 expenditures were not properly supported by the School Corporation's records. The School Corporation did have internal controls in place; however, they were not effective in preventing these errors. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (g) Be adequately documented. . . ." 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." INDIANA STATE BOARD OF ACCOUNTS 21 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not have policies and procedures in place to properly maintain documentation of expenses allocated to earmarking requirements and to verify that expenditures were reported accurately on the Form 9. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the proper allocation of the earmarking requirement could not be determined, and the reported Form 9 expenditures were not properly supported by financial records. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure Form 9 reporting is accurate and earmarking requirements are met. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 Subject: Special Education Cluster (IDEA) - Matching, Level of Effort, Earmarking Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): H027A200084, H027A210084, H027A220084, H027A230084, H027X210084, H173A200104, H173A210104, H173A220104, H173A230104, H173X210104 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Other Matters Condition and Context Earmarking A portion of the School Corporation's Special Education allocation was required to be set aside for the mandatory Coordinated Early Intervening Services (CEIS) reservation as well as the nonproportionate share reservation. The required amount to be set aside was indicated in the Special Education grant application. The School Corporation is responsible for monitoring each required set aside throughout the life of the grant to ensure the obligation is met. The School Corporation did not separate the earmarking for the mandatory CEIS reservation from the nonpublic proportionate share. The same expenditures in the amount of $2,647 were earmarked in both earmarking categories. In addition, the School Corporation did not have actual expenditure amounts to account for the fiscal year 2021 preschool grant nonproportionate share amount. The expenditures used were a percentage of total expenditures. The School Corporation did have internal controls in place; however, they were not effective in preventing these errors. INDIANA STATE BOARD OF ACCOUNTS 20 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Level of Effort - Individual Transactions (Vendor) The Form 9 (financial) data was submitted by the School Corporation to the Indiana Department of Education (IDOE) semiannually. The data reported included the School Corporation's expenditures recorded during that period. The IDOE calculated Maintenance of Effort based on the expenditure information submitted on the Form 9 for that fiscal year. To verify amounts used by the IDOE in their computation were derived from the ledger of the School Corporation, costs were reviewed to ensure they were recorded properly as to account and object code and reported correctly on the Form 9. In fiscal year 2021, Form 9 testing, 5 out of 25 expenditure codes were not properly supported by the School Corporation's records. In 2022, Form 9 testing, 6 out of 25 expenditures were not properly supported by the School Corporation's records. The School Corporation did have internal controls in place; however, they were not effective in preventing these errors. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (g) Be adequately documented. . . ." 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." INDIANA STATE BOARD OF ACCOUNTS 21 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not have policies and procedures in place to properly maintain documentation of expenses allocated to earmarking requirements and to verify that expenditures were reported accurately on the Form 9. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the proper allocation of the earmarking requirement could not be determined, and the reported Form 9 expenditures were not properly supported by financial records. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure Form 9 reporting is accurate and earmarking requirements are met. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 Subject: Special Education Cluster (IDEA) - Matching, Level of Effort, Earmarking Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): H027A200084, H027A210084, H027A220084, H027A230084, H027X210084, H173A200104, H173A210104, H173A220104, H173A230104, H173X210104 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Other Matters Condition and Context Earmarking A portion of the School Corporation's Special Education allocation was required to be set aside for the mandatory Coordinated Early Intervening Services (CEIS) reservation as well as the nonproportionate share reservation. The required amount to be set aside was indicated in the Special Education grant application. The School Corporation is responsible for monitoring each required set aside throughout the life of the grant to ensure the obligation is met. The School Corporation did not separate the earmarking for the mandatory CEIS reservation from the nonpublic proportionate share. The same expenditures in the amount of $2,647 were earmarked in both earmarking categories. In addition, the School Corporation did not have actual expenditure amounts to account for the fiscal year 2021 preschool grant nonproportionate share amount. The expenditures used were a percentage of total expenditures. The School Corporation did have internal controls in place; however, they were not effective in preventing these errors. INDIANA STATE BOARD OF ACCOUNTS 20 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Level of Effort - Individual Transactions (Vendor) The Form 9 (financial) data was submitted by the School Corporation to the Indiana Department of Education (IDOE) semiannually. The data reported included the School Corporation's expenditures recorded during that period. The IDOE calculated Maintenance of Effort based on the expenditure information submitted on the Form 9 for that fiscal year. To verify amounts used by the IDOE in their computation were derived from the ledger of the School Corporation, costs were reviewed to ensure they were recorded properly as to account and object code and reported correctly on the Form 9. In fiscal year 2021, Form 9 testing, 5 out of 25 expenditure codes were not properly supported by the School Corporation's records. In 2022, Form 9 testing, 6 out of 25 expenditures were not properly supported by the School Corporation's records. The School Corporation did have internal controls in place; however, they were not effective in preventing these errors. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (g) Be adequately documented. . . ." 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." INDIANA STATE BOARD OF ACCOUNTS 21 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not have policies and procedures in place to properly maintain documentation of expenses allocated to earmarking requirements and to verify that expenditures were reported accurately on the Form 9. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the proper allocation of the earmarking requirement could not be determined, and the reported Form 9 expenditures were not properly supported by financial records. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure Form 9 reporting is accurate and earmarking requirements are met. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 Subject: Special Education Cluster (IDEA) - Matching, Level of Effort, Earmarking Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): H027A200084, H027A210084, H027A220084, H027A230084, H027X210084, H173A200104, H173A210104, H173A220104, H173A230104, H173X210104 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Other Matters Condition and Context Earmarking A portion of the School Corporation's Special Education allocation was required to be set aside for the mandatory Coordinated Early Intervening Services (CEIS) reservation as well as the nonproportionate share reservation. The required amount to be set aside was indicated in the Special Education grant application. The School Corporation is responsible for monitoring each required set aside throughout the life of the grant to ensure the obligation is met. The School Corporation did not separate the earmarking for the mandatory CEIS reservation from the nonpublic proportionate share. The same expenditures in the amount of $2,647 were earmarked in both earmarking categories. In addition, the School Corporation did not have actual expenditure amounts to account for the fiscal year 2021 preschool grant nonproportionate share amount. The expenditures used were a percentage of total expenditures. The School Corporation did have internal controls in place; however, they were not effective in preventing these errors. INDIANA STATE BOARD OF ACCOUNTS 20 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Level of Effort - Individual Transactions (Vendor) The Form 9 (financial) data was submitted by the School Corporation to the Indiana Department of Education (IDOE) semiannually. The data reported included the School Corporation's expenditures recorded during that period. The IDOE calculated Maintenance of Effort based on the expenditure information submitted on the Form 9 for that fiscal year. To verify amounts used by the IDOE in their computation were derived from the ledger of the School Corporation, costs were reviewed to ensure they were recorded properly as to account and object code and reported correctly on the Form 9. In fiscal year 2021, Form 9 testing, 5 out of 25 expenditure codes were not properly supported by the School Corporation's records. In 2022, Form 9 testing, 6 out of 25 expenditures were not properly supported by the School Corporation's records. The School Corporation did have internal controls in place; however, they were not effective in preventing these errors. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (g) Be adequately documented. . . ." 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." INDIANA STATE BOARD OF ACCOUNTS 21 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not have policies and procedures in place to properly maintain documentation of expenses allocated to earmarking requirements and to verify that expenditures were reported accurately on the Form 9. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the proper allocation of the earmarking requirement could not be determined, and the reported Form 9 expenditures were not properly supported by financial records. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure Form 9 reporting is accurate and earmarking requirements are met. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 Subject: Special Education Cluster (IDEA) - Matching, Level of Effort, Earmarking Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): H027A200084, H027A210084, H027A220084, H027A230084, H027X210084, H173A200104, H173A210104, H173A220104, H173A230104, H173X210104 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Other Matters Condition and Context Earmarking A portion of the School Corporation's Special Education allocation was required to be set aside for the mandatory Coordinated Early Intervening Services (CEIS) reservation as well as the nonproportionate share reservation. The required amount to be set aside was indicated in the Special Education grant application. The School Corporation is responsible for monitoring each required set aside throughout the life of the grant to ensure the obligation is met. The School Corporation did not separate the earmarking for the mandatory CEIS reservation from the nonpublic proportionate share. The same expenditures in the amount of $2,647 were earmarked in both earmarking categories. In addition, the School Corporation did not have actual expenditure amounts to account for the fiscal year 2021 preschool grant nonproportionate share amount. The expenditures used were a percentage of total expenditures. The School Corporation did have internal controls in place; however, they were not effective in preventing these errors. INDIANA STATE BOARD OF ACCOUNTS 20 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Level of Effort - Individual Transactions (Vendor) The Form 9 (financial) data was submitted by the School Corporation to the Indiana Department of Education (IDOE) semiannually. The data reported included the School Corporation's expenditures recorded during that period. The IDOE calculated Maintenance of Effort based on the expenditure information submitted on the Form 9 for that fiscal year. To verify amounts used by the IDOE in their computation were derived from the ledger of the School Corporation, costs were reviewed to ensure they were recorded properly as to account and object code and reported correctly on the Form 9. In fiscal year 2021, Form 9 testing, 5 out of 25 expenditure codes were not properly supported by the School Corporation's records. In 2022, Form 9 testing, 6 out of 25 expenditures were not properly supported by the School Corporation's records. The School Corporation did have internal controls in place; however, they were not effective in preventing these errors. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (g) Be adequately documented. . . ." 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." INDIANA STATE BOARD OF ACCOUNTS 21 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not have policies and procedures in place to properly maintain documentation of expenses allocated to earmarking requirements and to verify that expenditures were reported accurately on the Form 9. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the proper allocation of the earmarking requirement could not be determined, and the reported Form 9 expenditures were not properly supported by financial records. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure Form 9 reporting is accurate and earmarking requirements are met. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 Subject: Special Education Cluster (IDEA) - Matching, Level of Effort, Earmarking Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): H027A200084, H027A210084, H027A220084, H027A230084, H027X210084, H173A200104, H173A210104, H173A220104, H173A230104, H173X210104 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Other Matters Condition and Context Earmarking A portion of the School Corporation's Special Education allocation was required to be set aside for the mandatory Coordinated Early Intervening Services (CEIS) reservation as well as the nonproportionate share reservation. The required amount to be set aside was indicated in the Special Education grant application. The School Corporation is responsible for monitoring each required set aside throughout the life of the grant to ensure the obligation is met. The School Corporation did not separate the earmarking for the mandatory CEIS reservation from the nonpublic proportionate share. The same expenditures in the amount of $2,647 were earmarked in both earmarking categories. In addition, the School Corporation did not have actual expenditure amounts to account for the fiscal year 2021 preschool grant nonproportionate share amount. The expenditures used were a percentage of total expenditures. The School Corporation did have internal controls in place; however, they were not effective in preventing these errors. INDIANA STATE BOARD OF ACCOUNTS 20 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Level of Effort - Individual Transactions (Vendor) The Form 9 (financial) data was submitted by the School Corporation to the Indiana Department of Education (IDOE) semiannually. The data reported included the School Corporation's expenditures recorded during that period. The IDOE calculated Maintenance of Effort based on the expenditure information submitted on the Form 9 for that fiscal year. To verify amounts used by the IDOE in their computation were derived from the ledger of the School Corporation, costs were reviewed to ensure they were recorded properly as to account and object code and reported correctly on the Form 9. In fiscal year 2021, Form 9 testing, 5 out of 25 expenditure codes were not properly supported by the School Corporation's records. In 2022, Form 9 testing, 6 out of 25 expenditures were not properly supported by the School Corporation's records. The School Corporation did have internal controls in place; however, they were not effective in preventing these errors. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (g) Be adequately documented. . . ." 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." INDIANA STATE BOARD OF ACCOUNTS 21 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not have policies and procedures in place to properly maintain documentation of expenses allocated to earmarking requirements and to verify that expenditures were reported accurately on the Form 9. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the proper allocation of the earmarking requirement could not be determined, and the reported Form 9 expenditures were not properly supported by financial records. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure Form 9 reporting is accurate and earmarking requirements are met. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 Subject: Special Education Cluster (IDEA) - Matching, Level of Effort, Earmarking Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): H027A200084, H027A210084, H027A220084, H027A230084, H027X210084, H173A200104, H173A210104, H173A220104, H173A230104, H173X210104 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Other Matters Condition and Context Earmarking A portion of the School Corporation's Special Education allocation was required to be set aside for the mandatory Coordinated Early Intervening Services (CEIS) reservation as well as the nonproportionate share reservation. The required amount to be set aside was indicated in the Special Education grant application. The School Corporation is responsible for monitoring each required set aside throughout the life of the grant to ensure the obligation is met. The School Corporation did not separate the earmarking for the mandatory CEIS reservation from the nonpublic proportionate share. The same expenditures in the amount of $2,647 were earmarked in both earmarking categories. In addition, the School Corporation did not have actual expenditure amounts to account for the fiscal year 2021 preschool grant nonproportionate share amount. The expenditures used were a percentage of total expenditures. The School Corporation did have internal controls in place; however, they were not effective in preventing these errors. INDIANA STATE BOARD OF ACCOUNTS 20 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Level of Effort - Individual Transactions (Vendor) The Form 9 (financial) data was submitted by the School Corporation to the Indiana Department of Education (IDOE) semiannually. The data reported included the School Corporation's expenditures recorded during that period. The IDOE calculated Maintenance of Effort based on the expenditure information submitted on the Form 9 for that fiscal year. To verify amounts used by the IDOE in their computation were derived from the ledger of the School Corporation, costs were reviewed to ensure they were recorded properly as to account and object code and reported correctly on the Form 9. In fiscal year 2021, Form 9 testing, 5 out of 25 expenditure codes were not properly supported by the School Corporation's records. In 2022, Form 9 testing, 6 out of 25 expenditures were not properly supported by the School Corporation's records. The School Corporation did have internal controls in place; however, they were not effective in preventing these errors. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (g) Be adequately documented. . . ." 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." INDIANA STATE BOARD OF ACCOUNTS 21 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not have policies and procedures in place to properly maintain documentation of expenses allocated to earmarking requirements and to verify that expenditures were reported accurately on the Form 9. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the proper allocation of the earmarking requirement could not be determined, and the reported Form 9 expenditures were not properly supported by financial records. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure Form 9 reporting is accurate and earmarking requirements are met. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-004 Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the following compliance requirement: Allowable Costs/Cost Principles. Federal funds may only be used to pay staff for work that has occurred supporting the objective of the federal program. As such, proper time and effort documentation is to be maintained by the School Corporation. The purpose of time and effort recording is to provide documentation of the time spent working on specific federal programs to ensure charges are accurate for each program. Reimbursements were prepared by one employee and reviewed by another employee prior to submission; however, this internal control was not effective in preventing noncompliance with allowable costs/cost principles. INDIANA STATE BOARD OF ACCOUNTS 22 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Out of 14 employees tested, 1 employee was paid 50 percent of their salary from the COVID-19 - Education Stabilization Funds (ESF) grant and 50 percent of their salary from another funding source. The School Corporation was not able to provide documentation that supported the hours paid from the ESF grant. The ineffective internal controls were systemic throughout the audit period. The noncompliance was isolated to payrolls for September and October of 2022. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities . . . (iv) Encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary records as defined in the recipient's or subrecipient's written policy; . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." INDIANA STATE BOARD OF ACCOUNTS 23 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) While across the board stipends are not permitted, LEAs may pay staff for COVID-related work that has been documented. Most, if not all, staff likely had extra responsibilities as well as time and effort to respond to the pandemic. ESSER funds can be used to pay staff for that work and LEAs are responsible for documenting that this work occurred. (Indiana Department of Education, ESSER III Frequently Asked Questions (FAQs) updated August 16, 2021) Cause A proper system of internal controls over the payroll disbursements for employees who worked with both federal and nonfederal programs was not properly designed or implemented by management. The School Corporation did not maintain a record of the actual time spent working on extra responsibilities for COVID-related work to ensure allowability. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the proper allocation could not be determined for reimbursements for one employee's payroll for September and October of 2022. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a system of internal controls to ensure that disbursement documentation will be obtained, retained, and made available for audit and that the disbursements comply with the Allowable Costs/Cost Principles compliance requirement.
FINDING 2024-004 Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the following compliance requirement: Allowable Costs/Cost Principles. Federal funds may only be used to pay staff for work that has occurred supporting the objective of the federal program. As such, proper time and effort documentation is to be maintained by the School Corporation. The purpose of time and effort recording is to provide documentation of the time spent working on specific federal programs to ensure charges are accurate for each program. Reimbursements were prepared by one employee and reviewed by another employee prior to submission; however, this internal control was not effective in preventing noncompliance with allowable costs/cost principles. INDIANA STATE BOARD OF ACCOUNTS 22 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Out of 14 employees tested, 1 employee was paid 50 percent of their salary from the COVID-19 - Education Stabilization Funds (ESF) grant and 50 percent of their salary from another funding source. The School Corporation was not able to provide documentation that supported the hours paid from the ESF grant. The ineffective internal controls were systemic throughout the audit period. The noncompliance was isolated to payrolls for September and October of 2022. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities . . . (iv) Encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary records as defined in the recipient's or subrecipient's written policy; . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." INDIANA STATE BOARD OF ACCOUNTS 23 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) While across the board stipends are not permitted, LEAs may pay staff for COVID-related work that has been documented. Most, if not all, staff likely had extra responsibilities as well as time and effort to respond to the pandemic. ESSER funds can be used to pay staff for that work and LEAs are responsible for documenting that this work occurred. (Indiana Department of Education, ESSER III Frequently Asked Questions (FAQs) updated August 16, 2021) Cause A proper system of internal controls over the payroll disbursements for employees who worked with both federal and nonfederal programs was not properly designed or implemented by management. The School Corporation did not maintain a record of the actual time spent working on extra responsibilities for COVID-related work to ensure allowability. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the proper allocation could not be determined for reimbursements for one employee's payroll for September and October of 2022. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a system of internal controls to ensure that disbursement documentation will be obtained, retained, and made available for audit and that the disbursements comply with the Allowable Costs/Cost Principles compliance requirement.
FINDING 2024-004 Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the following compliance requirement: Allowable Costs/Cost Principles. Federal funds may only be used to pay staff for work that has occurred supporting the objective of the federal program. As such, proper time and effort documentation is to be maintained by the School Corporation. The purpose of time and effort recording is to provide documentation of the time spent working on specific federal programs to ensure charges are accurate for each program. Reimbursements were prepared by one employee and reviewed by another employee prior to submission; however, this internal control was not effective in preventing noncompliance with allowable costs/cost principles. INDIANA STATE BOARD OF ACCOUNTS 22 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Out of 14 employees tested, 1 employee was paid 50 percent of their salary from the COVID-19 - Education Stabilization Funds (ESF) grant and 50 percent of their salary from another funding source. The School Corporation was not able to provide documentation that supported the hours paid from the ESF grant. The ineffective internal controls were systemic throughout the audit period. The noncompliance was isolated to payrolls for September and October of 2022. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities . . . (iv) Encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary records as defined in the recipient's or subrecipient's written policy; . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." INDIANA STATE BOARD OF ACCOUNTS 23 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) While across the board stipends are not permitted, LEAs may pay staff for COVID-related work that has been documented. Most, if not all, staff likely had extra responsibilities as well as time and effort to respond to the pandemic. ESSER funds can be used to pay staff for that work and LEAs are responsible for documenting that this work occurred. (Indiana Department of Education, ESSER III Frequently Asked Questions (FAQs) updated August 16, 2021) Cause A proper system of internal controls over the payroll disbursements for employees who worked with both federal and nonfederal programs was not properly designed or implemented by management. The School Corporation did not maintain a record of the actual time spent working on extra responsibilities for COVID-related work to ensure allowability. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the proper allocation could not be determined for reimbursements for one employee's payroll for September and October of 2022. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a system of internal controls to ensure that disbursement documentation will be obtained, retained, and made available for audit and that the disbursements comply with the Allowable Costs/Cost Principles compliance requirement.
FINDING 2024-004 Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the following compliance requirement: Allowable Costs/Cost Principles. Federal funds may only be used to pay staff for work that has occurred supporting the objective of the federal program. As such, proper time and effort documentation is to be maintained by the School Corporation. The purpose of time and effort recording is to provide documentation of the time spent working on specific federal programs to ensure charges are accurate for each program. Reimbursements were prepared by one employee and reviewed by another employee prior to submission; however, this internal control was not effective in preventing noncompliance with allowable costs/cost principles. INDIANA STATE BOARD OF ACCOUNTS 22 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Out of 14 employees tested, 1 employee was paid 50 percent of their salary from the COVID-19 - Education Stabilization Funds (ESF) grant and 50 percent of their salary from another funding source. The School Corporation was not able to provide documentation that supported the hours paid from the ESF grant. The ineffective internal controls were systemic throughout the audit period. The noncompliance was isolated to payrolls for September and October of 2022. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities . . . (iv) Encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary records as defined in the recipient's or subrecipient's written policy; . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." INDIANA STATE BOARD OF ACCOUNTS 23 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) While across the board stipends are not permitted, LEAs may pay staff for COVID-related work that has been documented. Most, if not all, staff likely had extra responsibilities as well as time and effort to respond to the pandemic. ESSER funds can be used to pay staff for that work and LEAs are responsible for documenting that this work occurred. (Indiana Department of Education, ESSER III Frequently Asked Questions (FAQs) updated August 16, 2021) Cause A proper system of internal controls over the payroll disbursements for employees who worked with both federal and nonfederal programs was not properly designed or implemented by management. The School Corporation did not maintain a record of the actual time spent working on extra responsibilities for COVID-related work to ensure allowability. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the proper allocation could not be determined for reimbursements for one employee's payroll for September and October of 2022. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a system of internal controls to ensure that disbursement documentation will be obtained, retained, and made available for audit and that the disbursements comply with the Allowable Costs/Cost Principles compliance requirement.
FINDING 2024-004 Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the following compliance requirement: Allowable Costs/Cost Principles. Federal funds may only be used to pay staff for work that has occurred supporting the objective of the federal program. As such, proper time and effort documentation is to be maintained by the School Corporation. The purpose of time and effort recording is to provide documentation of the time spent working on specific federal programs to ensure charges are accurate for each program. Reimbursements were prepared by one employee and reviewed by another employee prior to submission; however, this internal control was not effective in preventing noncompliance with allowable costs/cost principles. INDIANA STATE BOARD OF ACCOUNTS 22 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Out of 14 employees tested, 1 employee was paid 50 percent of their salary from the COVID-19 - Education Stabilization Funds (ESF) grant and 50 percent of their salary from another funding source. The School Corporation was not able to provide documentation that supported the hours paid from the ESF grant. The ineffective internal controls were systemic throughout the audit period. The noncompliance was isolated to payrolls for September and October of 2022. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities . . . (iv) Encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary records as defined in the recipient's or subrecipient's written policy; . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." INDIANA STATE BOARD OF ACCOUNTS 23 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) While across the board stipends are not permitted, LEAs may pay staff for COVID-related work that has been documented. Most, if not all, staff likely had extra responsibilities as well as time and effort to respond to the pandemic. ESSER funds can be used to pay staff for that work and LEAs are responsible for documenting that this work occurred. (Indiana Department of Education, ESSER III Frequently Asked Questions (FAQs) updated August 16, 2021) Cause A proper system of internal controls over the payroll disbursements for employees who worked with both federal and nonfederal programs was not properly designed or implemented by management. The School Corporation did not maintain a record of the actual time spent working on extra responsibilities for COVID-related work to ensure allowability. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the proper allocation could not be determined for reimbursements for one employee's payroll for September and October of 2022. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a system of internal controls to ensure that disbursement documentation will be obtained, retained, and made available for audit and that the disbursements comply with the Allowable Costs/Cost Principles compliance requirement.
FINDING 2024-005 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context Internal controls were in place over reporting where two individuals were involved in submitting and reviewing the reports prior to submission. However, the internal controls were not effective in order to ensure compliance with requirements related to the grant agreement and the following compliance requirement: Reporting. INDIANA STATE BOARD OF ACCOUNTS 24 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation was required to submit an annual data report to the Indiana Department of Education. Data to be submitted includes, but is not limited to, current period expenditure, prior period expenditure, and expenditures per activity. During the audit period, the School Corporation submitted 2021-2022 expenditures for ESSER II - Year 3 and ESSER III - Year 3 instead of reporting 2022-2023 expenditures for ESSER II - Year 3 and ESSER III - Year 3. The lack of effective internal controls was systemic throughout the audit period. The noncompliance was isolated to the ESSER II - Year 3 and ESSER III - Year 3 reporting. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause The School Corporation had policies and procedures in place over proper reporting on its annual data report; however, officials indicated their understanding of the guidance provided as to which year's expenditures were to be reported was different than what was required. INDIANA STATE BOARD OF ACCOUNTS 25 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Expenditures reported on the annual data report for ESSER II and ESSER III year 3 were not accurate. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure expenditures on the annual data reporting for ESSER II and ESSER III are accurate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context Internal controls were in place over reporting where two individuals were involved in submitting and reviewing the reports prior to submission. However, the internal controls were not effective in order to ensure compliance with requirements related to the grant agreement and the following compliance requirement: Reporting. INDIANA STATE BOARD OF ACCOUNTS 24 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation was required to submit an annual data report to the Indiana Department of Education. Data to be submitted includes, but is not limited to, current period expenditure, prior period expenditure, and expenditures per activity. During the audit period, the School Corporation submitted 2021-2022 expenditures for ESSER II - Year 3 and ESSER III - Year 3 instead of reporting 2022-2023 expenditures for ESSER II - Year 3 and ESSER III - Year 3. The lack of effective internal controls was systemic throughout the audit period. The noncompliance was isolated to the ESSER II - Year 3 and ESSER III - Year 3 reporting. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause The School Corporation had policies and procedures in place over proper reporting on its annual data report; however, officials indicated their understanding of the guidance provided as to which year's expenditures were to be reported was different than what was required. INDIANA STATE BOARD OF ACCOUNTS 25 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Expenditures reported on the annual data report for ESSER II and ESSER III year 3 were not accurate. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure expenditures on the annual data reporting for ESSER II and ESSER III are accurate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context Internal controls were in place over reporting where two individuals were involved in submitting and reviewing the reports prior to submission. However, the internal controls were not effective in order to ensure compliance with requirements related to the grant agreement and the following compliance requirement: Reporting. INDIANA STATE BOARD OF ACCOUNTS 24 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation was required to submit an annual data report to the Indiana Department of Education. Data to be submitted includes, but is not limited to, current period expenditure, prior period expenditure, and expenditures per activity. During the audit period, the School Corporation submitted 2021-2022 expenditures for ESSER II - Year 3 and ESSER III - Year 3 instead of reporting 2022-2023 expenditures for ESSER II - Year 3 and ESSER III - Year 3. The lack of effective internal controls was systemic throughout the audit period. The noncompliance was isolated to the ESSER II - Year 3 and ESSER III - Year 3 reporting. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause The School Corporation had policies and procedures in place over proper reporting on its annual data report; however, officials indicated their understanding of the guidance provided as to which year's expenditures were to be reported was different than what was required. INDIANA STATE BOARD OF ACCOUNTS 25 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Expenditures reported on the annual data report for ESSER II and ESSER III year 3 were not accurate. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure expenditures on the annual data reporting for ESSER II and ESSER III are accurate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context Internal controls were in place over reporting where two individuals were involved in submitting and reviewing the reports prior to submission. However, the internal controls were not effective in order to ensure compliance with requirements related to the grant agreement and the following compliance requirement: Reporting. INDIANA STATE BOARD OF ACCOUNTS 24 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation was required to submit an annual data report to the Indiana Department of Education. Data to be submitted includes, but is not limited to, current period expenditure, prior period expenditure, and expenditures per activity. During the audit period, the School Corporation submitted 2021-2022 expenditures for ESSER II - Year 3 and ESSER III - Year 3 instead of reporting 2022-2023 expenditures for ESSER II - Year 3 and ESSER III - Year 3. The lack of effective internal controls was systemic throughout the audit period. The noncompliance was isolated to the ESSER II - Year 3 and ESSER III - Year 3 reporting. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause The School Corporation had policies and procedures in place over proper reporting on its annual data report; however, officials indicated their understanding of the guidance provided as to which year's expenditures were to be reported was different than what was required. INDIANA STATE BOARD OF ACCOUNTS 25 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Expenditures reported on the annual data report for ESSER II and ESSER III year 3 were not accurate. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure expenditures on the annual data reporting for ESSER II and ESSER III are accurate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context Internal controls were in place over reporting where two individuals were involved in submitting and reviewing the reports prior to submission. However, the internal controls were not effective in order to ensure compliance with requirements related to the grant agreement and the following compliance requirement: Reporting. INDIANA STATE BOARD OF ACCOUNTS 24 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation was required to submit an annual data report to the Indiana Department of Education. Data to be submitted includes, but is not limited to, current period expenditure, prior period expenditure, and expenditures per activity. During the audit period, the School Corporation submitted 2021-2022 expenditures for ESSER II - Year 3 and ESSER III - Year 3 instead of reporting 2022-2023 expenditures for ESSER II - Year 3 and ESSER III - Year 3. The lack of effective internal controls was systemic throughout the audit period. The noncompliance was isolated to the ESSER II - Year 3 and ESSER III - Year 3 reporting. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause The School Corporation had policies and procedures in place over proper reporting on its annual data report; however, officials indicated their understanding of the guidance provided as to which year's expenditures were to be reported was different than what was required. INDIANA STATE BOARD OF ACCOUNTS 25 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Expenditures reported on the annual data report for ESSER II and ESSER III year 3 were not accurate. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure expenditures on the annual data reporting for ESSER II and ESSER III are accurate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
(1) Summary of Auditors’ Results Financial Statements a. Type of report issued on whether the financial statements were prepared in accordance with generally accepted accounting principles: Unmodified b. Internal control deficiencies over financial reporting disclosed by the audit of the financial statements: • Material weaknesses: No • Significant deficiencies: No c. Noncompliance material to the financial statements: No Federal Awards d. Internal control deficiencies over major programs disclosed by the audit: • Material weaknesses: Yes • Significant deficiencies: No e. Type of report issued on compliance for major programs: Qualified f. Audit findings that are required to be reported in accordance with 2 CFR 200.516(a): Yes g. Major programs: • Student Financial Assistance Cluster – Various ALNs h. Dollar threshold used to distinguish between Type A and Type B programs: $750,000 i. Auditee qualified as a low-risk auditee: Yes (2) Findings Relating to the Financial Statements Reported in Accordance with Government Auditing Standards None (3) Findings and Questioned Costs Relating to Federal Awards Finding Number: 2024-001 Program: Student Financial Assistance Cluster ALN #: 84.063 and 84.268 Federal Award #’s: P063P235372, P268K225372 Federal Award Years: July 1, 2023 to June 30, 2024 Federal Agencies: U.S. Department of Education Pass-Through Entity: N/A – Direct Award Compliance Requirement: Enrollment Reporting Finding Type: Material Weakness and Material Noncompliance Criteria: Under the Pell grant and the Direct and Federal Family Education Loan programs, institutions are required to report enrollment information via the National Student Loan Data System (NSLDS) (OMB No. 845-0035). The administration of the Title IV programs depends heavily on the accuracy and timeliness of the enrollment information reported by institutions. Institutions must review, update and verify student enrollment statuses, program information and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Financial Aid Professionals (NSLDSFAP) website. The data on the institution’s Enrollment Reporting Roster, or Enrollment Maintenance page, is what NSLDS has as the most recently certified enrollment information. There are two categories of enrollment information, “Campus Level” and “Program Level,” both of which need to be reported accurately and have separate record types. The NSLDS Enrollment Reporting Guide provides the requirements and guidance for reporting enrollment details using the NSLDS Enrollment Reporting Process. Institutions are responsible for timely reporting, whether they report directly or via a third-party servicer. Institutions must complete and return the Enrollment Reporting roster file placed in their Student Aid Internet Gateway (SAIG) (OMB No. 1845-0002) mailboxes sent by ED via NSLDS within 15 days. An institution determines how often it receives the Enrollment Reporting roster file with the default set at a minimum of every 60 days. Once received, the institution must update for changes in the data elements for the Campus Record and the Program Record identified above, and submit the changes electronically through the batch method, spreadsheet submittal or the NSLDS website. Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition found: During our testwork over student enrollment reporting, we noted Regent did not report all changes to students’ status within the required 60 days. For a sample of 40 students who were recipients of Direct Loans or Pell Grants between July 1, 2023 and June 30, 2024 and that had been identified as having withdrawn, graduated, or modified their enrollment status as defined by Regent’s Satisfactory Academic Progress Policy through a change in course load, the following was noted: For 33 students out of the 40 selected for compliance testing, Regent did not transmit the students’ status change to NSLDS within 60 days. Additionally, based on management’s further investigation, it was determined that there were multiple submissions during the year that were delayed and resulted in enrollment reporting being outside of the 60- day window. Additionally, while Regent has controls in place to ensure that enrollment changes are reported timely to the National Student Clearinghouse (NSC), the control does not ensure that any required correspondence with NSC to resolve data matters is happening timely. Cause: For the students noted above, management communicated that there were delays in the data transmission from the NSC and the NSLDS. While the data was provided to the NSC in a timely manner, there were issues with the data that needed to be resolved between Regent and the NSC in order to proceed with the submission to NSLDS. For the reasons noted above, we determined the related control in place at Regent, which is designed to address the timeliness of the transmission reports, is not designed at a level to verify the timeliness of the data transmission to the NSC nor ensure that any subsequent issues are resolved timely and that the data is ultimately submitted to the NSLDS timely. Proper perspective: Regent’s policy is to submit enrollment data to the NSC on a predetermined schedule that allows Regent to comply with the enrollment reporting requirements. For our sample of 40 students with status changes, we identified 33 students where the status change was not reported within 60 days. Upon further review by management, there were a total of 13 submissions for which the delay in the resolution of issues between Regent and the NSC resulted in the enrollment information being reported outside of the 60-day reporting requirement. As a result of these delays, there were a significant number of changes that were not reporting timely. Possible asserted effect: Untimely submission of student enrollment information affects the determinations that lenders and servicers of students’ loans make related to in-school status, deferments, graces periods, and repayment schedules, as well as the federal government’s payment and interest schedules. Questioned costs: None noted. Statistical sampling: The sample was not intended to be, and was not, a statistically valid sample. Repeat finding: A similar finding was not reported in the prior year. Recommendation: We recommend that Regent implement additional controls to ensure that the transmission reports are received by NSLDS timely. Additionally, we recommend Regent evaluate its processes and procedures when submitting data to the NSC to ensure that any data issues impacting the timeliness of the transmissions are resolved. Views of responsible officials: Regent agrees with this finding. Regent intends to strengthen its controls and quality assurance measures over the timeliness of enrollment information to NSLDS.
(1) Summary of Auditors’ Results Financial Statements a. Type of report issued on whether the financial statements were prepared in accordance with generally accepted accounting principles: Unmodified b. Internal control deficiencies over financial reporting disclosed by the audit of the financial statements: • Material weaknesses: No • Significant deficiencies: No c. Noncompliance material to the financial statements: No Federal Awards d. Internal control deficiencies over major programs disclosed by the audit: • Material weaknesses: Yes • Significant deficiencies: No e. Type of report issued on compliance for major programs: Qualified f. Audit findings that are required to be reported in accordance with 2 CFR 200.516(a): Yes g. Major programs: • Student Financial Assistance Cluster – Various ALNs h. Dollar threshold used to distinguish between Type A and Type B programs: $750,000 i. Auditee qualified as a low-risk auditee: Yes (2) Findings Relating to the Financial Statements Reported in Accordance with Government Auditing Standards None (3) Findings and Questioned Costs Relating to Federal Awards Finding Number: 2024-001 Program: Student Financial Assistance Cluster ALN #: 84.063 and 84.268 Federal Award #’s: P063P235372, P268K225372 Federal Award Years: July 1, 2023 to June 30, 2024 Federal Agencies: U.S. Department of Education Pass-Through Entity: N/A – Direct Award Compliance Requirement: Enrollment Reporting Finding Type: Material Weakness and Material Noncompliance Criteria: Under the Pell grant and the Direct and Federal Family Education Loan programs, institutions are required to report enrollment information via the National Student Loan Data System (NSLDS) (OMB No. 845-0035). The administration of the Title IV programs depends heavily on the accuracy and timeliness of the enrollment information reported by institutions. Institutions must review, update and verify student enrollment statuses, program information and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Financial Aid Professionals (NSLDSFAP) website. The data on the institution’s Enrollment Reporting Roster, or Enrollment Maintenance page, is what NSLDS has as the most recently certified enrollment information. There are two categories of enrollment information, “Campus Level” and “Program Level,” both of which need to be reported accurately and have separate record types. The NSLDS Enrollment Reporting Guide provides the requirements and guidance for reporting enrollment details using the NSLDS Enrollment Reporting Process. Institutions are responsible for timely reporting, whether they report directly or via a third-party servicer. Institutions must complete and return the Enrollment Reporting roster file placed in their Student Aid Internet Gateway (SAIG) (OMB No. 1845-0002) mailboxes sent by ED via NSLDS within 15 days. An institution determines how often it receives the Enrollment Reporting roster file with the default set at a minimum of every 60 days. Once received, the institution must update for changes in the data elements for the Campus Record and the Program Record identified above, and submit the changes electronically through the batch method, spreadsheet submittal or the NSLDS website. Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition found: During our testwork over student enrollment reporting, we noted Regent did not report all changes to students’ status within the required 60 days. For a sample of 40 students who were recipients of Direct Loans or Pell Grants between July 1, 2023 and June 30, 2024 and that had been identified as having withdrawn, graduated, or modified their enrollment status as defined by Regent’s Satisfactory Academic Progress Policy through a change in course load, the following was noted: For 33 students out of the 40 selected for compliance testing, Regent did not transmit the students’ status change to NSLDS within 60 days. Additionally, based on management’s further investigation, it was determined that there were multiple submissions during the year that were delayed and resulted in enrollment reporting being outside of the 60- day window. Additionally, while Regent has controls in place to ensure that enrollment changes are reported timely to the National Student Clearinghouse (NSC), the control does not ensure that any required correspondence with NSC to resolve data matters is happening timely. Cause: For the students noted above, management communicated that there were delays in the data transmission from the NSC and the NSLDS. While the data was provided to the NSC in a timely manner, there were issues with the data that needed to be resolved between Regent and the NSC in order to proceed with the submission to NSLDS. For the reasons noted above, we determined the related control in place at Regent, which is designed to address the timeliness of the transmission reports, is not designed at a level to verify the timeliness of the data transmission to the NSC nor ensure that any subsequent issues are resolved timely and that the data is ultimately submitted to the NSLDS timely. Proper perspective: Regent’s policy is to submit enrollment data to the NSC on a predetermined schedule that allows Regent to comply with the enrollment reporting requirements. For our sample of 40 students with status changes, we identified 33 students where the status change was not reported within 60 days. Upon further review by management, there were a total of 13 submissions for which the delay in the resolution of issues between Regent and the NSC resulted in the enrollment information being reported outside of the 60-day reporting requirement. As a result of these delays, there were a significant number of changes that were not reporting timely. Possible asserted effect: Untimely submission of student enrollment information affects the determinations that lenders and servicers of students’ loans make related to in-school status, deferments, graces periods, and repayment schedules, as well as the federal government’s payment and interest schedules. Questioned costs: None noted. Statistical sampling: The sample was not intended to be, and was not, a statistically valid sample. Repeat finding: A similar finding was not reported in the prior year. Recommendation: We recommend that Regent implement additional controls to ensure that the transmission reports are received by NSLDS timely. Additionally, we recommend Regent evaluate its processes and procedures when submitting data to the NSC to ensure that any data issues impacting the timeliness of the transmissions are resolved. Views of responsible officials: Regent agrees with this finding. Regent intends to strengthen its controls and quality assurance measures over the timeliness of enrollment information to NSLDS.
2024-002 Program: CDBG – Entitlement/Special Purpose Grants Cluster Financial Assistance Listing Number: 14.218 Federal Agency: U.S. Department of Housing and Urban Development Award Year: All Grant Award Number: All Compliance Requirements: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: Per 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. This includes internal controls over maintaining records of the preparer and approver of required reports. Condition: We identified one (1) instance in which the City did not retain evidence to document the individual who reviewed and approved the required reports prior to submission. This consisted of one (1) financial report. Cause: The City's procedures did not include documenting the review and approval of the reports prior to submission. Effect: Ineffective controls over this area of compliance could result in reports that are inaccurate or incomplete being submitted or disclosed to the granting agency. Questioned Costs: No questioned costs were identified as a result of our audit procedures. Context/Sampling: A nonstatistical sample of two (2) out of four (4) cash on hand reports were selected for reporting testing. Repeat Finding from the Prior Year(s): Yes. Recommendation: The City has implemented the appropriate changes subsequent to the end of fiscal year 2024. During fiscal year 2024, the City had not fully implemented corrective actions. We recommend the City continue performing the corrective actions they made. Views of Responsible Official: The City concurs with the finding. See separate corrective action plan.
2024-002 Program: CDBG – Entitlement/Special Purpose Grants Cluster Financial Assistance Listing Number: 14.218 Federal Agency: U.S. Department of Housing and Urban Development Award Year: All Grant Award Number: All Compliance Requirements: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: Per 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. This includes internal controls over maintaining records of the preparer and approver of required reports. Condition: We identified one (1) instance in which the City did not retain evidence to document the individual who reviewed and approved the required reports prior to submission. This consisted of one (1) financial report. Cause: The City's procedures did not include documenting the review and approval of the reports prior to submission. Effect: Ineffective controls over this area of compliance could result in reports that are inaccurate or incomplete being submitted or disclosed to the granting agency. Questioned Costs: No questioned costs were identified as a result of our audit procedures. Context/Sampling: A nonstatistical sample of two (2) out of four (4) cash on hand reports were selected for reporting testing. Repeat Finding from the Prior Year(s): Yes. Recommendation: The City has implemented the appropriate changes subsequent to the end of fiscal year 2024. During fiscal year 2024, the City had not fully implemented corrective actions. We recommend the City continue performing the corrective actions they made. Views of Responsible Official: The City concurs with the finding. See separate corrective action plan.
2024-002 Program: CDBG – Entitlement/Special Purpose Grants Cluster Financial Assistance Listing Number: 14.218 Federal Agency: U.S. Department of Housing and Urban Development Award Year: All Grant Award Number: All Compliance Requirements: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: Per 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. This includes internal controls over maintaining records of the preparer and approver of required reports. Condition: We identified one (1) instance in which the City did not retain evidence to document the individual who reviewed and approved the required reports prior to submission. This consisted of one (1) financial report. Cause: The City's procedures did not include documenting the review and approval of the reports prior to submission. Effect: Ineffective controls over this area of compliance could result in reports that are inaccurate or incomplete being submitted or disclosed to the granting agency. Questioned Costs: No questioned costs were identified as a result of our audit procedures. Context/Sampling: A nonstatistical sample of two (2) out of four (4) cash on hand reports were selected for reporting testing. Repeat Finding from the Prior Year(s): Yes. Recommendation: The City has implemented the appropriate changes subsequent to the end of fiscal year 2024. During fiscal year 2024, the City had not fully implemented corrective actions. We recommend the City continue performing the corrective actions they made. Views of Responsible Official: The City concurs with the finding. See separate corrective action plan.
2024-002 Program: CDBG – Entitlement/Special Purpose Grants Cluster Financial Assistance Listing Number: 14.218 Federal Agency: U.S. Department of Housing and Urban Development Award Year: All Grant Award Number: All Compliance Requirements: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: Per 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. This includes internal controls over maintaining records of the preparer and approver of required reports. Condition: We identified one (1) instance in which the City did not retain evidence to document the individual who reviewed and approved the required reports prior to submission. This consisted of one (1) financial report. Cause: The City's procedures did not include documenting the review and approval of the reports prior to submission. Effect: Ineffective controls over this area of compliance could result in reports that are inaccurate or incomplete being submitted or disclosed to the granting agency. Questioned Costs: No questioned costs were identified as a result of our audit procedures. Context/Sampling: A nonstatistical sample of two (2) out of four (4) cash on hand reports were selected for reporting testing. Repeat Finding from the Prior Year(s): Yes. Recommendation: The City has implemented the appropriate changes subsequent to the end of fiscal year 2024. During fiscal year 2024, the City had not fully implemented corrective actions. We recommend the City continue performing the corrective actions they made. Views of Responsible Official: The City concurs with the finding. See separate corrective action plan.